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Full text of "Advertising as a business force : a compilation of experience records"

ADVERTISING AS 
A BUSINESS FORCE 



By 
PAUL TERRY CHERINGTON 

Of the Graduate School of Business Administration, 
Harvard University 



"Professor Cherington's sources for the book 
are the experiences and opinions and deduc- 
tions of men prominent in all lines of business, 
as they have^ appeared in the pages of those 
publications devoted to business topics. He 
has not started with a pet theory and sought 
only those facts which would bear it out. He 
has gone after the facts in the places where the 
facts were most easily accessible, and the 
principles to be deducted from them worth any 
quantity of analyzing. It is always better to 
know what really happened than to under- 
stand perfectly what should have happened — 
and didn't " 

- Excerpt from Editorial in Printers' Ink. 



SHEPARD HOWLAND 

667 GREEN ST. 
CAMBRIDGE (A) MASS. 



ADVERTISING AS A BUSINESS FORCE 



ADVERTISING AS A 
BUSINESS FORCE 

A COMPILATION OF EXPERIENCE RECORDS 

BY 

PAUL TERRY CHERINGTON 

INSTRUCTOR IN COMMERCIAL ORGANIZATION IN THE GRADUATE 
SCHOOL OF BUSINESS ADMINISTRATION, HARVARD UNIVERSITY 




PUBLISHED BY 

DOUBLEDAY, PAGE & COMPANY 

FOR 

THE ASSOCIATED ADVERTISING CLUBS 
OF AMERICA 

1913 



Copyright, 1913, by 

The Associated Advertising Clubs of America 

All rights reserved, including that of 

translation into foreign languages, 

including the Scandinavian 



^\ZW 



To 
HERBERT S. HOUSTON 

CHAIRMAN OF THE EDUCATIONAL COMMITTEE 

OF THE 
ASSOCIATED ADVERTISING CLUBS OF AMERICA 

THIS BOOK IS DEDICATED 



' Such earnest natures are the fiery -pith. 

The compact nucleus. Wound which systems grow 1 
Mass after mass becomes inspired thereunlh. 
And whirls impregnate with the central glow." 



PREEACE 

THE purpose of this book is to provide a text for the 
individual instruction work for the Educational Com- 
mittee of the Associated Advertising Clubs of America. 
Throughout the work of compilation we shall endeavor to 
keep strictly to this purpose. In the selection of experience 
records it will be our aim to make our choices primarily with 
this object in mind. In a choice between two articles of 
equal value, the availability of one or the other for individual 
instruction purposes will lead to its selection. 

If the book, in addition to being useful for this individual in- 
struction work, serves to put before advertisers, in a somewhat 
new light, material with which they are already familiar, we 
shall be glad that its usefulness may be thus extended. 

Again, if the compilation of these experience records serves 
to preserve from disappearance, in the files of the publications 
in which they appeared, some extremely valuable material 
covering the development of advertising during the last few 
years, we shall be glad that its usefulness has been enhanced 
by that service also. 

The plan of the book embraces the selection of records of 
experience showing how advertising activities have been 
related to the selling results they were designed to produce. 
These experience records will be compiled under a few general 
headings corresponding with chapter divisions, and these 
general headings will be arranged in two main groups. The 
first of these groups will discuss the organization of the distri- 
bution system for handling goods sold ultimately at retail, and 
will discuss the advertising aspects of the successive steps in 
this system. Some attention also will be given to the changes 



viii FREFACE— Continued 

in the distribution system and the advertising aspects of the 
new conditions resulting from these changes. The second group 
of chapters will be devoted to a discussion of present-day 
advertising problems and methods. 

The plan for the compilation provides for comparatively 
little constructive interpretation on the part of the compiler 
of the quotations selected. We shall aim to make the quota- 
tions tell their own story as far as possible. We believe that 
what we sacrifice in this way, in the matter of unity, we shall 
gain in preservation of freshness and variety of viewpoint — to 
say nothing of the preservation of the air of authority which 
can only come from a much wider range of knowledge than any 
one person can possess. 



We wish to express our thanks to those who have so liberally 
assisted us in making this compilation. John Irving Romer, 
editor of Printers* Ink, Le Roy Fairman, editor of Advertising 
and Selling, and D. V. Casey, managing editor of System, we 
wish to especially thank for their cordial co-operation in giving 
us access to their files, and we wish to thank the proprietors 
of each of these magazines for permission to use the material 
which they have published. 

We wish, also, to acknowledge our appreciation of the 
extremely cordial co-operation which we have received in all 
matters from Chairman Herbert S. Houston of the Educational 
Committee, and from the members of the committee, who have 
from time to time examined the work while it was in progress 
and have been of great assistance with their frank criticisms 
and valuable suggestions. 



CONTENTS 
PART I 

ADVERTISING AND DISTRIBUTION 
CHAPTER I 

Page 

Selling Problems and the Advertiser ... 3 

How one advertiser changed his advertising campaign 
to fit the results of an analysis of his market — 
Advertising as a business force — The article, the 
consumer, and the distribution system and their place 
in the advertising plan — A method of commercial 
analysis prepared by an advertising manager — 
Another method prepared by an advertising agent — 
How a baker analyzed the bread market of New 
York City — The facts in production and distribu- 
tion which govern the advertising. 

CHAPTER II 

The Distribution System 29 

The main steps in the distribution system for goods 
finally sold at retail — The conflict between the 
various parts of the system — Manufacturers who 
avoid jobbing — Jobbers who manufacture — Re- 
tailers who buy direct — Retailers who cannot buy 
except through jobbers — The resulting disorder — 
The effect on advertising — The dilemma of the 
retailer — The strength of the retailer's position. 



X CONTENTS— Conimwed 

CHAPTER III 

PAGE 

The Relation of Advertising to the Distribution 

System 47 

What to do before advertising — Sales possibilities 
and sales methods — Developing sales possibilities 
by advertising — Effect of advertising on adver- 
tisability of goods — Effects of advertising on un- 
advertised goods — Advertising and its effects on 
demand and distribution — Weak links in big 
campaigns. 

CHAPTER IV 

The Problems of Medium Selection .... 68 
Some of the chief mediums — Newspaper, magazine, 
out-of-door and street-car advertising as illustra- 
tions of progress in the bettering of mediums — An 
experience in correlating national and local mediums 

— The advertiser's ability as a factor in medium 
selection — Commercial problems and advertising 
practices — The case of "Carnation Milk." 

CHAPTER V 

Advertising and the Consumer 89 

The modern consumer — How advertising shapes con- 
sumer's wants — The strong and the weak points 
in the consumer's line of defence — Spending power 

— Saving instincts — Standards of living — Price 
habits — Buying customs — The effects on the con- 
sumer of the increased number of appeals — The 
Encyclopsedia Britannica campaign — Increasing 
and improving the consumer's wants — The tailor's 
defence against ready-made clothing — One way to 
meet substitution. 



CONTENTS— Continued xi 

CHAPTER VI 

PAGE 

The "Regular" Retailer 119 

The process of restandardization in retailing — The 
value of the small market as a short-cut — The 
place of the "regular" retailer in national adver- 
tising plans — Dealer help — The case of Crisco — 
Dealer literature — Six days in a druggist's mail — 
Window displays — The Victor Company's use of 
the dealers' windows — Appeals to the consumer 
as dealer help — Getting the dealer to work in the 
selling system — The Sealshipt oyster plan — How 
the advertiser could help the small retailer run his 
business. 

CHAPTER Vn 

Advertising Problem of the New Types of Re- 
tailer 157 

The baffling scarcity of data — Entering the retail 
trade through the department store — Creating 
department-store individuality — Advertising as- 
pects of the chain store — The methods of the 
United Cigar Stores Company — The spread of the 
chain-store idea — The chain store in the drug 
business — Some important chain systems — Mail- 
order business — Advertising aspects of co-operative 
enterprises — The United Drug Company — Co- 
operative retail control of a wholesale house — 
Retailers co-operate in their common work. 

CHAPTER VIII 

Advertising and the Wholesaler .... 206 
The disturbed conditions in the wholesale field — 
The growth of large retailers and the jobbers' work 
— The appeals to the consumer as they affect the 



xii CONTENT^—Contimied 

PAGE 

jobber — Why the jobber is on the defensive — 
Modern distribution and the place of the middleman 

— A wholesale grocer's defence of his business — 
Why jobbers manufacture — The private-brand 
war — The pros and cons of the private brand — 
How a roofing concern reclaimed its business from 
jobbers' brand control — The Steero campaign — 
The jobber's relations with the manufacturer — 
How one manufacturer forced the jobbers into line 

— The Hunt fruit case — The Scott paper case — 
A manufacturer's defence of the grocery jobbers — 
Jobbers and price maintenance. 

CHAPTER IX 

The Manufacturer and His Advertising Problems 257 
Advertising policy as a part of manufacturing plan — 
The factory and its place in advertising plans — 
Advertising uses of the factory — How the National 
Cash Register sales force worked over a small 
advertisement — Advertising problems — A new 
product — Protection of the goods in trade by 
means of advertising — Fashion as an advertising 
problem — Selling policy and its advertising effects. 

PART II 

ADVERTISING PROBLEMS AND METHODS 

CHAPTER X 

Advertising and Selling Co-ordination . . . 291 
The problems of production may be standardized — 
The problems of selling are largely individual — 
Organization of the selling force — The National 
Cash Register system — The American Multi- 
graph Sales Company's advertising and selling 



CONTENTS— Continued xiii 



PAGE 



plans — The methods of the National White Lead 
Company — H. J. Heinz Company's appeals to the 
consumer through the distribution force — "Sell- 
ing" advertising plans to the sales force — Getting 
even the clerk to help — Walker grape juice 
methods. 

CHAPTER XI 

Trade-mark Problems 331 

The uses of the trade-mark — Trade-marks as com- 
mercial autographs — As weapons of offence or 
defence — Trade-mark families — The Rubberset 
group and others — Legal aspects of the trade-mark 
— Trade-marks refused registration — Good marks 
to use — Trade-mark selection — Wise and foolish 
advertising names — Trade-mark policy — Selling 
textiles under trade-mark — The Onyx hosiery ex- 
perience — Trade-mark problems. 

CHAPTER Xn 

Price Maintenance 380 

What is a fair price .^ — How is a fair price to be pre- 
served? — Price maintenance and the advertiser — 
Prices of "restricted" and "unrestricted" goods — 
A sad-iron maker's experience and views — Argu- 
ments for price maintenance — Some grocers' views 
of price maintenance — Hotel Astor coffee — Ar- 
guments against price maintenance — Duke C. 
Bower's opinion — The arguments of the Macy 
Company — The Miles vs. Park decision — The 
Dick Mimeograph case — The Kodak Company's 
price policy — Methods of price maintenance — 
The effects of price maintenance on the volume of 
trade. 



xiv CONTENTS— Confinwed 

CHAPTER Xm 

PAGE 

Disposal of Advertising Costs 429 

"Who pays for advertising?" — What is meant by 
"pays"? — What is meant by "advertising"? — 
Payment for advertising depends on effect of adver- 
tising on distribution costs and margin of profit — 
Profit margins of manufacturer, wholesaler and 
retailer — Selling costs and the factors that reduce 
it — When does advertising expense become an 
investment? — How much to spend for advertising ? 
— Bookkeeper's disposal of advertising expendi- 
tures — Educating dealers to know who pays for 
advertising — Social effects of advertising. 

CHAPTER XIV 

The Advertising Manager 461 

The work of the advertising manager — What he could 
learn behind the counter — The real functions of the 
advertising manager — The services he cannot dele- 
gate — His relation to the selling policy — Co-opera- 
tion with the selling force — The scope of the 
advertising manager — What the advertising mana- 
ger should be — His duties and training — How 
some managers got into the business — The need of 
ability to work with others — The demands of a 
modern advertising manager's position. 

CHAPTER XV 

The Advertising Agency 493 

The growth of the agency — The problems of the 
agency — The work of the agency — Medium selec- 
tion — Trade aid — Data gathering — The agency 
and the selling problems — Relations of agencies to 



CONTENTS— Con^mwerf xv 



PAGE 



advertisers — The professional character of agency 
service — The question of compensation — The pres- 
ent and future of the agency business. 

CHAPTER XVI 

Conclusion 537 

New uses and new forms of advertising — Legal re- 
cognition of the dangers of advertising abuses — 
City boosting — Railroad advertising — The meth- 
ods of the Harriman Lines — The Hudson-Manhat- 
tan Railway experience — Legal restraints on 
advertising — The Printers^ Ink statute — State 
boards of advertising proposed — New demands on 
advertising — (1) Contact with selling — (2) Accu- 
rate knowledge — (3) Exacting standards of 
honor. 

Index 563 



ADVERTISING AS A BUSINESS FORCE 



CHAPTER I 

SELLING PROBLEMS AND THE ADVERTISER 

ACANNER of baked beans had been advertising for 
years that his beans were the best canned beans that 
could be produced. In spite of careful devising and 
skilful execution of his advertising plans his sales increased only 
moderately. 

One day he — or his advertising agent for him — made an 

analysis of his market. His methods of analysis and his 

figures are his own secret, but he found something 

Analysis ^^^e this: About 60 per cent, of the families in "his 

of the market" did not use baked beans at all, as a regular 

Showed P^^^ of their diet. About 20 per cent, preferred to 

bake their own beans, and about 10 per cent, were 

using his beans, leaving 10 per cent, of the possible trade in the 

hands of his competitors. Then he saw a great light. He had 

been advertising merely to keep the 10 per cent, of the possible 

bean trade of his region which he already had, and to win from 

his competitors a share of another 10 per cent., but he was 

making no efifective appeal to 80 per cent, of the possible trade. 

He had analyzed his product, but he had not made a 

study of his possible market. 

The advertising plan was rearranged to appeal to the two 
great unreached classes — those who did not use baked beans 
Another ^^^ those who baked their own — and before long 
Analysis the results were surprisingly good. And then the 
Needed §^^^^ slackened. A leak had developed somewhere 
and only a small part of the expected effects of the 
advertising came back in the shape of business. Another inves- 
tigation showed that the advertising appeal was not adequately 

3 



4 ADVERTISING AS A BUSINESS FORCE 

co-ordinated with the distribution system. These beans were 
not always "present" when consumer-interest became con- 
sumer-demand — when Mrs. Consumer asked her grocer for 
a can of Mr. Advertiser's beans. 

This was a more difficult problem to solve than the other, and 
the manufacturer is not at all sure that he has it solved even yet. 
At least he is skeptical about the permanence of his solution. 
But he is sure that his advertising is giving him results far 
better than those he secured when he based his plans on one 
or two instead of all three of the elements of the situation — 
the goods, the market, and the system of distribution. He 
now sees advertising in its various aspects as a business 
force.* 

Advertising as a business force is the theme of this study. 

It is our plan to investigate this side of the subject by 

The Plan examining concrete cases chosen from such records 

0/ This as are available. Advertising technique we shall 

°° study only incidentally, leaving a detailed discussion 

to others. 

Furthermore, we shall seek to simplify our study by confining 
our attention to the advertising problems connected with the 
sale of those articles which find their final outlet into consump- 
tion in small units — goods finally sold at retail. 

We shall try to find what is true in this field first, rather than 
to generahze over all the possible fields of advertising activity. 
If we can find how advertising is tied up with the various steps 
in distributing hardware, groceries, drygoods, drugs, and the 
like, we may establish principles which can be traced as working 
in community publicity, railway advertising, and the other 
fields where the desired ends are attained by more indirect 
methods. 

A good chess player never forgets that he is in the game 
for one thing. He wants to checkmate his opponent's 



* This case has been based in part on actual facts. It should not, however, 
be taken as more than a hypothetical case to emphasize the two points made. 



SELLING PROBLEMS 5 

king. He may be able to do it in two moves, or he may 
take a hundred moves to do it. But that one thing is what 
he is after. And so the good advertiser never loses sight 
of the fact that he is aiming finally at sales. He may be 
moving the pawn of general publicity, he may be protecting 
a castle of fixed price, he may be making any one of a 
thousand advertising moves, but ultimately he expects his 
advertising by its effects on sales to make his business 
bigger, or steadier, or more permanent, or more profitable, or 
all of these together. 

In the field to which we are confining our attention — 
merchandise for individual consumption — this ultimate purpose 
takes the form of a large number of small sales to individual 
consumers. And the number must not only be large but it 
must have all the possible elements of permanence and 
stability. 

The channels through which these sales are to be executed 
become an element in every advertising plan in this field. The 
advertiser, whether he be a producer, a wholesaler or a retailer, 
is obliged to lay out his attack on the consumer's buying desires 
with an eye to the means by which those desires are to be con- 
verted into sales. 

The article to be sold, the possible consumer, and the means 

by which the article is brought to the consumer are the 

three great factors in distribution of goods for retail 

The consumption which bear on advertising. An analysis 

Consumer, ^^ these factors by some clear, logical method thus 

and the becomes not merely a valuable adjunct of the adver- 

System tising plan, but a necessary part of it. We have 

seen how it changed the advertising methods of the 

bean-canner. The question is: How is such an analysis 

to be made? 

No plan ever has been devised, and it is a safe prediction that 
none ever will be, which can be used as a foot rule for measuring 
all the elements of an advertising campaign. But a number of 



6 ADVERTISING AS A BUSINESS FORCE 

methods have been worked out which contain valuable sug- 
gestions for analytical studies of this kind. 

A METHOD OF COMMERCIAL ANALYSIS 

For instance, R. E. Fowler, advertising manager of the 

Printz-Biederman Co., of Cleveland, Ohio, is sponsor for an 

ingenious and suggestive series of charts showing how 

Method an analysis might be undertaken of goods {Printers' 

„ 0/ Ink, February 18, 1912, p. 53), of the possible market 
Ptoccuaitb 

(Printers' Ink, February 22, 1912, p. 20) and of the 

means of distribution {Printers' Ink, March 14, 1912, p. 28). 
These charts, while they cannot of course be taken as a final 
and accurate working plan for every, or any, advertising cam- 
paign, do suggest the kind of points every advertiser needs to 
have in mind. And they are valuable as a suggestion of the 
point of view an advertiser should cultivate whether he be 
interested in national, sectional, or local advertising effort. 

Mr. Fowler's chart is prepared from the standpoint of a 
manufacturer's advertising manager. And this viewpoint be- 
comes apparent in many features of the schedule as he has 
laid it out. This point should be kept in mind when studying 
the outline. 

Furthermore, it should be remembered that this is merely 
a suggestion of analytical method. It is doubtful whether 
Mr. Fowler even designed it to be used as a scale, or yard- 
stick, by which every advertising plan could be judged, or 
tested. If it will help students of advertising to approach 
their problems with a clearer idea of the complexity of the 
problems they must solve it will have served its purpose 
well. 

This chart and those which follow should not be merely 
read over or glanced through. If they are to be of real service 
they must be studied. And the study must be critical, and it 
must be careful and painstaking. 



SELLING PROBLEMS 7 

Mr. Fowler's chart for analysis of the commodity for sale 
is as follows: 

TABULAR ANALYSIS of PRODUCT* 



Product 



j By education 
( By necessity 



Demand 



Serviceability 



Quality 



Price to 



Profit to 



Competition 



it compare with 
articles on these 



i Developed 
Undeveloped 
Forced or 
Natural 
Permanent or 
Seasonable 
Is it a necessity? 
Is it a luxury? 
Is it a convenience? 
Is it durable? 
Is it economical in use? 
foi raw materials 
\ of design THow does 

J of workmanship < competing 
J of appearance (^items? 
/of finish 

{Jobber 'jHigh 
Broker {■^r ■,- j How does it compare with 
Retailer ( [competing articles? 

Consumer J Low 

rf JJ^'^^t^"'^'" (Larger than on competiiig lines 
) ^ ,^'^ \ Same as on competing lines 

ro -er /Smaller than on competing lines 

Officered by old men 
Oflficered by young men 
Aggressive 
Lax 

Long established 
Newly established 
Wealthy 
Limited means 
Their sales plans 
Their adv. campaign 
Their policy toward customers 
Their sales manager 
Their sales force 

Their credit department's attitude 
toward customers 



An examination of these items will show that each one has 
some bearing on the selection of the form and method of appeal 
to the consumer. 

*Printers' Itik, February 8, 1912, p. 54. 



8 



ADVERTISING AS A BUSINESS FORCE 



Mr. Fowler's tabular plan of analyzing the possible market 
for the commodity suggests a second set of factors bearing on 
the advertising: 



Location 



TABULAR ANALYSIS OF THE POSSIBLE FIELD OF DEMAND' 

iCity f Wealthy 

Town Well-to-do 

Country Poor 

Local Married 

Territorial Single 
National Young 

Middle-aged 
Old 

f Male ■/ Laborers. . . 

Farmers 
Mechanics 
Clerks 
Professions 
I Business Men 



Field 



Consumers 



^Skilled 
lunskilled 



Climate 



'• Female. . . . 

f Frigid 
Temperate 
Tropic 
Length of 
Seasons. 
Temperat're 
Rainfall 
Vegetation 



[Rich 

Medium 
-iPoor 

Married 

Single 

Young 

Old 

Middle-aged 

Servants 

Factory Workers 

OfBce Workers 

Trade Workers 

Prof. Workers 

Mothers 

Society or 
Club Women 



T)octors 
Lawj'ers 
Ministers 
Dentists 
Mech. Engr. 
Elec. Engr. 
Civil Engr. 
Etc. 



Financial 
condition 
depends on 



Transpor'tion 



Crops 

Mining 

Manufacturing 

Transportation Lines 

Speculation 

Prof. Services Rendered 

Railroads 
Water Routes 
Trolley 
Wagons 
Pack Trains 



*Printers' Ink, February 22, 1912, p. 22. 



SELLING PROBLEMS 9 

TABULAR ANALYSIS OF THE POSSIBLE FIELD OF DEMAND — Cout* 

( [Length of Haul 

Transpor'tion \ Rates 

[Method of Packing 

Officered by Old Men 
Officered by Yoimg Men 
Aggressive 
Lax 

Long Established. 
Field -/ Newly Established 

Wealthy 
Competition J Limited Means 

Their Sales Plans 

Their Sales Mgr. 

Their Sales Force 

Their Policy Toward Customers 

Their Credit Department's 

Attitude Toward Customers 
Their Adv. Campaign 

The various factors in the distribution system and the 
available advertising mediums for reaching them are covered by 
Mr. Fowler in a third chart, and this, hke the others, is full of 
suggestions : 

ANALYSIS SHOWING SCHEME OF DISTRIBUTIONf 







National Publication 






on Adv. 






Catalogues 




National ■ 


Mailing Lists 
Follow-up Letters 


Direct 




Local Solicitors 


to 




Mail-order Clubs 


Con- 




' Special Offers 


sumer - 




r Newspaper Adv. 


by 




Bill Boards 


Mail 




Street Cars 


Order 




Catalogues 




Local 


Mailing Lists 
Follow-up Letters 
Special Offers 
Local Solicitors 
Mail-order Clubs 



"Printers' Ink, February 22, 1912, p. 22. 
^Printers' Ink March 14, 191 2, pp. 30 and 32. 



10 



ADVERTISING AS A BUSINESS FORCE 



ANALYSIS SHOWING SCHEME OF DISTRIBUTION — Continued* 



[Direct 

to 
Con- 
sumer 

by 

Mail 
Order 



Ter'torial 



From 
Factory 

to 
Retailer , 
to Con 



National 



Local ■{ 



Sectional Magazine 

Adv. 
Newspaper Adv. 
Bill Boards 
Street Cars 
Catalogues 
Follow-up Letters 
Mailing Lists 
Special Offers 
Local Solicitors 
Mail-order Clubs 



Branch Offices 
National Adv. 
Auxiliary Adv. 
Salesmen 
Education of 



To 
Dealer 



To 
Consu'er 



Trade Papers 

Catalogues 

Follow-up Letters 

Mailing Lists 

Posters 

Street Car Cards 

Window Cards 

Win'w Suggest'ns 

Cuts 

Copy 

Pers'l Assistance 

Education of Sales 

Force 
Inquiries Referred 



Catalogues 
Follow-up Letters 
Personal Letters 
Samples 
Canvassers 



Dealer 



Consumer 



Salesmen 

Education of 
Orders from Canvassers 
Newspaper Adv. 
Publishing List of Dealers 
Bill Board Campaign 
Street Car Adv. 
Window Displays 

Education of Sales Force f Catalog's ^ 

Demonstration if possible J Foll'w-ups 

Adv. sent Consumers | Samples if 

on Dealers' Mailing List [ possible ^ 

Newspaper Adv. 

Bill Board Campaign 

Street Car Adv. 

Window Displays 

Demonstrations if possible 

Canvassers 

Catalogues 

Follow-ups 

Samples if possible 



* Printers' Ink, March 14, 191ii, pp. 30 and 32. 



SELLING PROBLEMS 



11 



ANALYSIS SHOWING SCHEME OF DISTRIBUTION ~Co7ltinued* 



From Factory 

to Retailer 
to Consumer 



Terri- 
torial 



^^ 



Through Regular 

Channels 
Jobber to Retailer 
to 

Consumer 



Na- 
tional 



Local 



*Printers' Ink. March 14. 1912, pp. 30 and 32. 



{Sectional Magazines 
Balance same as dealer 
classification above 

{Sectional Magazines 
Balance same as 
consumer classification above 

National Jobbers Magazines 
Trade Papers 
National Magazine Adv. 
Manufacturers' Salesmen 
Jobber -I Personal Letters 

Follow-up Propositions 
Edu. of Jobbers' Salesmen 
Orders taken by Mfrs. 
[Salesmen given to Jobbers 

National Mag. Adv. 
Trade Papers 
Salesmen 
Catalogues 

Follow-up Letters and Folders 
Dealer \ ^''^ Board Campaign 
Street Car Adv. 
Window Displays 
Cuts 

Education of Salespeople 
Referring of Inquirers 
Personal Assistance 

f National Mag. Adv. 
Bill Board Campaign 
Street Car Adv. 
Dealers' Window Displays 
Cons'm'r^ Dealers' Newspaper Adv. 
Catalogues 
Follow-up Letters 
Demonstrations if possible 
Canvassers 
Samples if possible 



fNewspaper Adv. 
Salesmen 
Personal Calls 
Personal Letters 
Orders taken by Mfrs. Sales- 
men given to Jobbers 
Follow-up Propositions 
Edu. of Jobbers' Salesmen 



Jobber 



12 



ADVERTISING AS A BUSINESS FORCE 



ANALYSIS SHOWING SCHEME OF DISTRIBUTION — Cont* 



Newspaper Adv. 
Local Bill Board Campaign 
Local Street Car Cam- 
paign 
Window Displays 
Canvasser's Orders from Con- 



Through Regular 

Channels 

Jobber to Retailer 

to 

Consumer 



Local 



Dealer 



Ter't'al 



sumers 
Catalogues 
Follow-up Letters 
Publishing List of Dealers 
Education of Sales Force 
Adv. sent to Consumers 

on Dealers Mailing List 
Demonstrations if possible 

(-Newspaper Adv. 
Bill Board Campaign 
Street Car Campaign 
Dealer's Window Displays 
Demonstrations 
Canvassers 
Catalogues 
Follow-ups 
Samples if possible 



Jobber f 

Dealer < Same as local above 

Consumer (^ 



Cons m'r < 



ANOTHER ANALYTICAL PLAN 



Another method of approach to the subject is that worked out 
by Gerald B. Wadsworth of New York. This method is de- 
tailed by Mr. Wadsworth in a series of articles appearing under 
the title "Principles and Practice of Advertising" in Advertising 
and Selling during 1911-12. (Copyrighted, 1912, by Gerald B. 
Wadsworth.) In the July, 1912, issue of that paper, Mr. 
Wadsworth summed up some of his main points in a set of 
diagrams which it will be found interesting and suggestive to 
compare with the charts of Mr. Fowler. 



"Printers' Ink, March 14, 1912, pp. 30 and 32. 



SELLING PROBLEMS 



13 



ANALYTICAL CHART— PRINCIPLES AND PRACTICE OF 
ADVERTISING 

Copyrighted iqi2 — By Gerald B Wadsworth 
The advertising man has to deal with and consider four important, general 
factors — Commodities, Conditions, Methods and Results. 

FIRST SECTION 



COSIHODITIES 



SECOND SECTION 
CONDITIONS 

ASludyofclrcuio- 
itsncps thai influ- 



COhSIDERATIONS CONSIDER-XTIONS 

The advertising man Npxl be should obtai.> 

inusl first acquire a a knowledge of the 

general knowledge of Specific com[nodit> in 

COHUDoditiea question 



THIRD SECTION 



CONSIDERATIONS 



Then he will be m a 


He should next Qndoiit 


A/tet Ibis he should 


position to judge as 


aboulTrade conditions 


study the user as t 


Co Its relative value 


generally, then ascer- 




aod conaequeDt ad 


lam how they affect 




vertisabilily 


the sale of the com- 


brought tobearon tile 




modily ia queslioo. 


individual members 
ofihalclasstochaoK* 
or stimulate the com- 
munity o( wants 



FOURTH SECTION 



A Study of Sales Pui- 



CONSTRL'CTION 



APPLICATION 



After this he is in a 
pot>tioD to define the 
form of appeal and to 
eonslnjct his copy 
accordingly The in- 
gredieoU should be 


L'nless the ad 
IS brought to iJ 
tion of the us 
most effective 
possible the 
ment v.ill not 


M-ientiScally com- 


Stable 



After the campa^n 
has l>e«n planned an 
estimate should be 
made of the minimum 



ACHIEVED 

When thecampaignhi 
been completed, con 
pare what has been aC' 
complished with 
expectations, and 
alyzethediseiepai 



the 



FIRST SECTION 

The advertising man should ascertain the status of a commodity, "both as 
to its intrinsic merit and the relation it bears to commodities in general. This 
enables him to judge as to the possibilities of its development. This may be 
accompHshed by determining to what degree it meets or fails to meet certain 
requirements. To assist this effort the study of commodities is regarded from 
three viewpoints: i. e. — Commercial Considerations, Material Considerations, 
Monetary Considerations. 

co^fl^fOD^^ES 



COMMEKCUL 
CONSIDERATIONS 






ABvansABiLin 


EFFICIENCY 


Scope of Utdity 


Meritonous 

Mediocre 

Impractical 


SOURCE 

timitcd 
Ualimitcd 


CONDITION 

Novelties 

Liwunes 

Necessities 

Staples 







PROPERTIES 


On^FERENTIATION 


Specific 
General 


llniqueness 
Excliisivenes3 


APPEARANCE 


UTILITY 


Attractiveness 
Distinctiveness 
Singularity 


Appropnatenesj 
Ad^iDUbJity 



MONETARY 
CONSIDERATIONS 



VALUE 




1 




1 1 


ESSENTIAL 


UTILITY 



SalabiJity 
Earning Power 
Convertibteneu 



TRUSTWORTHINESS 



Taogiblf 

lotangibie 



Constiiuei 
Collective 
iBtCfral 



Excessive 
Normal 
load equate 



14 ADVERTISING AS A BUSINESS FORCE 

CONDITIONS 























TRADE CONDITIONS 




















^ r~ 












1 








COMPETITION 


niSTRIBlTION 


- 


SALES POLICY 






1 










1 






























EFFECT 


"" BASIS 


CLASSES 

Actual 

Substitute 

Progressive 


PROCESS 

Direct 
Indirect 


POLICY 

Cooperative 
Antagonized. 


fH(>ry>^ 


BASIS 


Construe live 
Destructive 


Price 

Quality 

Utility 


Planned 
Haphazard 


^ertiianent 
Changeable 




EFFECT 

Active 
Passivi 


PER>LO.ENCE 

Reliable 
Unreliable 


RELATION'' 

Dependent 
Independent 


OBJECT 

OeSnil* 
Indefitlitj 




OUTLET 














1 


















PROCESS 

Direct 
Indirect 





Producer* 

Wholesalers 

Rctailera 


limited 
Unlimited: 


DEGREE 

Extensive 
Intensive 


JIETAILING 

Proteclea; 
Unprotected. 


ACTION 

Progressive^ 
Passive 


SCOPE 

'Resi'rIctTv* 

t'Drejt/ictiv* 




PRODUCTION 




OPER-^TION 

Tiestricted 
Unrestricted 


CONDITiaV 

Natural 
Stimulated 


QUALITY 

■Original' * 
Imitative 


EXPRESSION 












1 










AsiertatiVe 


FACTORS 


NATURE 

Related . 
UuRUUd 


•EXTENT 


Deroonstrativ'« 




Absolute 
^pendent 




Efficient 


iaction; 

I'rcmiture 
Belated 


POLICY 

Liberal 

iExtortionate> 






•JJATURE. 

Controlled 
lUacontroQed 




OPERATION 

Stimulative, 
Subjective 






SF.IX 




JJETffOD 

Educational 
AutoiDatio 






1 
\n ORGANIZATION 














1 






1 










PKOC 
Co6rd 
Subur 


ESS 
ijinative 


ACT 
Cooper 
Indepe 


ON. 
stive' 
idcot 


METHOI 
Syitemati 
Vmyiitnu 


>s 

tic 


UTILIT 
Ifficien 
4nefficit 


y 

nt 


salabi 

Constru 
Miscqas 


LITY 

d 

rtud 





SELLING PROBLEMS 

CONDITIONS 



CONSl'MF.R CONDITIONS 



15 





DEMAND 












I 






1 


NATURE 

Special 
General 


1 KFFEC r 

Immediate 
Cumulative 


.PROCESS 

'stimulated 
f Discouraged' 




1 EXTENT 

Limited 

Unlimited 




SPECIFIC! 

Incidental 

Fixed, 


ACTION 

Periodic 
Continuous 


CONDITION 

Natural 
Creative. 


SCOPE 

local 
National 



PHYSIOLOGICAL 



'ECONOMIC 






1 


1 


WANTS 

Environment 
State of Mind 


.A\TALTH 

Capital 
Income 


ENVIRONMENT 

Climatic 

Geological 

Socialogical 


VBUYING.CAPACITY 

Industrial 
Mooetary 



SOCIALOGICAL 

Density 
Migration 



PSYCHOLOGICAL 



1 


1 


1 


ACTS 

Conscious 
Unconscious 


iUBlT 

Incidental 
Dominant 
Universal 


■CREATION 

Composite 
Distinct 


NATURE- 

Character 
Stimulus 


.NATURE 

Constructive 
Destructive 


KINDS 

Revelant 
Irrcvelant 


MENT.U. PJiOCESS. 

Impulsive 
Deliberative. 


STIMULUS 

Substantial 
H>yotlieticaI 


CLASSES 

■ Attention 
Interest 
Desire 
Action 


BIPRESSlO^i 

Simplicity 
Conclusiveness 


PROCESS; 

Imaginative 
Suggestive 




QU.U,ITY 

Positive 
^Negative 


EXPRESSION 

Basis 

Contingeneiej 







iPRQPEjpiEa' 
Velocity' 



I NERVOUS ACTIVITIES 



Sensory 
Motor 



JUNDS 

I Reflex 

Simple 
Complex 
Reciprocal 



PROCESS 
Receptors 
Kffectord 



16 ADVERTISING AS A BUSINESS FORCE 

A FORM-AND-MOTIVE CHART 

A third type of analytical method is one which attempts to 
attach to the analysis a record of the forms of appeal which are 
called for, thus Imking the motive to be stirred vnth. the form of 
appeal which is to stir it. Under the title "WTiat Makes Men 
Buy?" this form of chart is described by Carroll D. Murphy of 
the System staff as follows: 



ANALYSIS OF SELLING 
OR ADVERTISING PROBLEM 


c 

1 

t 

"a 

< 


Buying Actioa 

Required of 

Prospect 


Increased Expenditure of 
Prospect's Money 


Change in Direction of 
Present Expenditure 


Class of Product 


A 


B 


c 


D 


Character of 
•Product 


Unfamiliar and 

Without Ueady 

Demand 


Unfamiliar but 
Matching Unex- 
pressed Demand 


Familiar but 
Offered in an 
Unusual way 


Similar to Goods 

Regularly Sold in 

Same Way 


Attitude of 
Prospect 


Thinks He is 

Doing Well 

Enough Without it 


Will Kcalizc Need 

When Informed 

of Product 


Habitually Buys 

Some Brand 
in Another Way 


Now Does 
Like Buying 


Task of 
Sales Campaign 


Must Make Him 

Feel His 

Disadvantage 


Must Teach Him 
What Product is 


Must Lead Him 
to Change 
This Habit 


Must Emphasize 
Brand to Gel 


Dominant Tone 
of Sales Campaign 


Persuasive and 
Impelling 


Analytical and 
Descriptive 


"Reason Why" 


Suggestive 
or Publicity 


s 

i: 
< 

a 

1 

< 
1 

_c 

3 

03 


Money 


X 


X 




X 


Utility 


X 




X 




Caution 


X 




X 




I'ridc. 




X 






Self-indulgence 






X 


X 



*Instead of interviewing retailers on why products are not 
moving and in this roundabout way getting at its selling prob- 
lems, one concern has for years kept an analytical sales record 

*System, September, 1912, p. 227. 



SELLING PROBLEMS 17 

of its various products, the kinds of argument and copy which 
have proved effective or otherwise, and the different api)eals 
which have successfully marketed each article. The chart is 
based on these records. Every time the firm has attacked a 
new sales problem or planned a new advertising campaign, its 
selling appeal has followed the lines of this chart. 

The first question asked when the marketing of a product 

is laid out with the aid of this form-and-motive chart is: 

The First "Must this selling effort induce an outright expenditure 

Ste-p in on the prospect's part, or merely change the direction 

Classifi- of expenditure to which he is accustomed? Must he 

cation decide to spend for it, or merely to choose it in place 
of something else?" 

Tests have demonstrated that this question is of prime impor- 
tance. To induce new, outright expenditure is a heavy burden 
on the entire sales machine. Contrary to the opinion of many 
it is easier for the later entrant into any selling field to arouse 
demand than for the pioneer. 

In the analysis of products four classes are found to be im- 
portant. If the new product you offer meets an existing and 
evident want or need, your prospect falls into the "B" column 
on the chart. "I've wanted something like that," he tells 
himself; and having long planned to make such a purchase 
when opportunity offered, he puts through the expenditure on 
his previous "O. K. " You need only to explain, describe and 
picture your product, showing that it is what he has needed 
and desired. 

If, however, the article is something whose lack he has never 
felt and which on its face appears to be merely an extra expense, 
your prospect is in column "A." He thinks that he is doing- 
well enough without your interference in his routine program 
of purchase and use. 

In this case your sales campaign, selling talk, demonstration 
and advertising must not only develop the possibility of more 
profit through your article, but must make the prospect feel 
keenly the disadvantage and loss of being without it. It must 
inspire him with a desire to save effort, make money or seize 
some new delight, and persuade him to make an unexpected 
outlay for the untried advantage it may be to him. "B" 
stands waiting for you to come and offer him what you have. 
"A" is headed in the wrong direction; you must stop him, turn 
him and take him back with you. 



18 ADVERTISING AS A BUSINESS FORCE 

Among such commodities as are in habitual use there is a 

further distinction. All of us must have food and clothing. 

All in one group or another must have paper and 

TheSub- pencils, or nails and cement. If you have goods 

^"7*4""* to sell similar to those I am buying, you will try to 

Second m^ke them as cheap, as good and as easy to buy as 

Group those I now use. If, then, by persistent advertising 

or other selling effort you stamp your brand on my 

mind more strongly than your rival, you attract my patronage. 

When I go to the counter I will probably inquire foryourproduct. 

If, however, your brand of bread must be ordered from a 

distance and I am used to buying bread at my home corner, or 

your coal must be ordered by mail, while another firm's salesman 

comes to my door, your selling tactics or words must do more 

than suggest to me the name of a brand; it must change a habit 

of mine. And a change of habit except along the line of least 

resistance must have a motive back of it. Your selling must show 

"reasons why." You find me w^alking past your door; you 

must give me an individual cause for turning in at your place. 

This fourfold classification suggests the essential links be- 
tween any product and its prospect — the dominant thought 
of its selling program. Other plans may pay, but a part of 
such sales efforts are directed at points on which your prospect is 
already sold. These principles have been used as a guide in the 
making, buying, selling, demonstrating and advertising of goods. 
Skilfully used, they reduce to black and white the position of 
any business. They indicate the angle of approach — the 
style of appeal which should predominate and the conditions 
that must be met. They guide the advertising manager as he 
writes and the sales manager as he coaches his men. 

An improved household article was recently put on the 

market. The first selling campaign failed; an investigation 

followed immediately. More than a hundred av^erage 

M'^^f prospects gave as a reason for their neglect the fact 
Selling ^^^^^ they had felt no disadvantage in their use of the 

Talk familiar device. It had always served and it still 
seemed good enough for them. The new article had 
been designed to overcome difficulty in cleaning; so far the ven- 
ture had unconsciously followed the chart. But at the selling 
crisis, the vital advantage of the new over the old device and 
the fact which made the old undesirable had been lost to view. 
An article in class "A" had been offered with class "B" sales talk. 



SELLING PROBLEMS 19 

When on the other hand the latest novel comes out in a 
second edition — testimony enough of its popularity — simple 
descriptions are sufficient to sell it. It falls into that class of 
commodities for which an eager public is waiting. So, too, 
mere announcement of the name sells gum, soft drinks and 
cigars. It takes genuine reasons, however, to make the house- 
wife risk her expensive woolens and laces with an unfamihar 
soap. It means a decided change in buying habits for her to 
demand a new brand of rice, cornstarch or cocoa, against which 
her grocer very probably will make a protest. There must be 
reasons behind the choice, and those reasons must be made 
plain. . . . 

At the bottom of the form-and-motive chart . . . these 
motives are roughly classified under five heads: 1. Money 
gain or money saving. 2. Utility, necessity, conveni- 
Motives ence, enjoyment, love, moral considerations. 3. Pride 
or emulation. 4. Caution and foresight. 5. Self- 
indulgence, such as luxury, ease, laziness, vanity, appetite. 

Every blend of the human motives which prompt buying can 
be classified, more or less loosely, under these heads. To de- 
termine that the tone of your sales talk and advertising should 
be persuasive, descriptive, logical or suggestive is not enough 
if you want to secure maximum returns from your campaign. 
Your appeal will still be made blindly unless directed at the 
most inviting specific motives you can discover in your prospects. 

The most elementary appeal is to offer your prospect money 

gain or money saving through his purchase. Any periodical 

you pick up offers examples of "bargain price" head- 

The dings: "Direct from the works saves 40 per cent." 

Appeal o^ "^^ factory prices on approval." The cheaper 

store plays up price more often than any other appeal. 

Sales schemes are generally based upon money gain; it is the 

chief resort of the advertiser who is groping his way. 

The money motive supplies the big outlet that accommodates 
supply to demand. By a quick shift of price and a limited time 
appeal to the money motive, stocks of all sorts and under every 
condition are closed out with a margin of profit or salvageT 
Over-emphasis of this money motive, however, may result in 
a loss of prestige and patronage where prospects want utility — 
quality rather than cheapness. 

Wherever there is a warm human touch — wherever the 
saleman's talk, the window display, the demonstration or the 



20 ADVERTISING AS A BUSINESS FORCE 

advertisement strikes home — the appeal can be classified by 
the chart as touching one or more of the vital motives which 
actually underlie your interest in your purchase. 

Such an appeal may not insure the success of a campaign, for 

at every step between factory and consumer there are chances 

of error in merchandising. During years of business, 

The Use of however, this form-and-motive chart has been proved 

^n^^W\ ^^ ^^ ^^ excellent preliminary test of sales tactics. 

Guarantee '^^^ average copy-writer throws aside an advertise- 

Success ment which has failed and starts anew. The salesman 

"tries out" one style of talk and, failing, discards it 

for another line of argument. But the man who has charted 

his problem, revises, develops and strengthens the form and 

direction of his appeal until it sets a new mark for sales. 

Under each of the five headings many specific motives may be 
grouped. Judgment, working on the results of a few tests, will 
determine for any business which are the vital ones 
A Case of \\iqX impel the average prospect to buy. The manu- 
b ^^Chanae ^ ^cturer of a patent weather strip launched his product 
of Appeal with enthusiastic copy and sales talk about the clean- 
liness and warmth of the "weather-tight home." 
But people did not buy. Then he changed his approach and 
pictured a house where dust and disease-laden floor drafts 
constantly threatened the health of the children. Immediately 
sales picked up. Unconsciously he had reclassified his product 
under the "A" group and changed the basis of his appeal from 
a lower to a higher motive. He secured extra expenditure 
from his prospects by making them feel the disadvantage, the 
danger of being without his product. His former appeal to 
mere comfort and pride had nothing like the selling force of 
this appeal to the more potent motives of caution and par- 
ental love. . . . 

ANALYSIS OF A BREAD MARKET 

How the With these charts in mind as suggestions of the 
Baking general plan for analytical studies, let us look for a 
Company moment at the methods employed in an actual case. 
theN^ew A concrete example is found in the case of the Ward 
York Baking Co.'s attack on the New York market. W. 
B. Ward, of this company, in telhng about its cam- 
paign, calls attention to the fact that the perishable nature of 



SELLING PROBLEMS 21 

the product figures as the dominant factor controlling the dis- 
tribution system. In the case of bread we have a commodity 
which must be completely distributed within a few hours, 
although its producers enjoy a partially compensating advan- 
tage in the universal character of the market. Mr. Ward says : 

. . . . *The first step was to take a census of the trade 
in New York and Brooklyn. We used a big map of New 
York and another one of Brooklyn. These were marked 
Census ^^ ^^^^ districts and territory was assigned to each 
salesman. Our sales force was recruited from the force 
we already had trained in Pittsburgh, and naturally our best 
men were chosen. After having been assigned to certain terri- 
tory, a salesman was provided with forms on which each pros- 
pective dealer in his section was to be listed. 

This listing was done after a personal call had been made 
upon the dealer and such information as "standing in the com- 
munity," "probable bread usage," etc., was obtained. 
the^Dealer There was every incentive for the salesman to be accu- 
rate in his reports. After the census was completed 
the work of securing dealer co-operation was conducted by the 
same men. Pencils and aprons bearing the name of our product 
were distributed among the grocery stores, and while such things 
were being passed around, our men took particular pains to get 
to know the dealer and his employees. Of course, our repre- 
sentatives were equipped with a strong selling talk, and to that 
I am coming presently. 

You will understand that all this work with the dealer was 
being carried on while our plants were being erected. In mak- 
ing and selling bread, our experience has shown that there is one 
selling point which overbalances all others in importance, and 
is most effective with both consumer and dealer alike. That 
point is cleanliness. Every step in our manufacturing, our 
merchandising and our advertising campaign verged on that 
one point. 

Our plants were advertised by newspaper and billboard as 

J. J "Snowwhite Temples of Cleanliness." We have in- 

ing Tadk- Vented and perfected machinery which cleans the flour, 

ing Points mixes the dough, kneads the bread, etc. This has not 

speed alone for its object, but also the elimination of 

'Printers' Ink March, 14, 1912, p. 3 



22 ADVERTISING AS A BUSINESS FORCE 

the bare hand. We not only wrapped the loaves in tissue 
paper, but we put white gloves upon the hands of our delivery 
men. In addition, their caps and uniforms were also white, 
further to carry out the idea of cleanliness. 

Even the way in which we have fixed our trade-mark label 
to the loaf has an interesting slant. For years bakers had been 
in the custom of pasting the labels on the bread. One day 
somebody discovered the obvious, and simply put the label in 
the bottom of the pan before the dough was poured in. The 
natural stickiness of the dough and the process of baking did 
the rest. Here, again, we accomplished the two great desid- 
erata, time-saving and cleanliness. 

In Pittsburgh we had had many visitors at our plants, and it 
was the best kind of advertising. When they saw the white- 
tiled rooms, the interior full of sunshine, the perfected ma- 
chinery, the absence of handling with the bare hands, the best 
sort of an impression was created; but when we came to New 
York it did not seem possible all at once, in starting a big busi- 
ness, to get the residents to come out and visit our plants, which 
were located in places inaccessible to the greater portion of the 
population. 

So here is where advertising and the printed word came into 
play. We used solid pages in the daily papers, playing up as 
strongly as we knew how all the points bearing upon the cleanli- 
ness of our product, and the speed with which it was gotten into 
the consumer's hands after it was made. We invited the people 
to visit our plants, and while it was not expected that many 
would respond, they were at least impressed with the fact 
that our conditions were right, and that we had nothing to 
conceal. Street cars, electric signs, and billboards were used 
in connection with the daily paper advertising. 

A happy condition which was entirely accidental probably 
helped the campaign along. I knew quite definitely the 
conditions under which a city's bread is usually baked. So 
I was not particularly shocked when I read the report of 
Commissioner of Accounts Fosdick that had just been sub- 
mitted to Mayor Gaynor. It said that of the 4,000 or more 
bakeries in Greater New York scarcely one hundred were 
above ground, and in buildings erected or remodeled for 
baking purposes. ... 

. . . When the papers began to print reports of such in- 
vestigations, it naturally helped our campaigning, but we did not 



SELLING PROBLEMS 23 

in any way inspire the stories nor employ a press agent. When 
we were ready to advertise we simply came forward with the 
facts about our own products, and told the truth in paid si)ace. 
The response was instantaneous. 

We operate 200 automobiles in New York for our delivery 
system. This again has a bearing upon our two selling points of 
speed and cleanliness. It is not particularly appetizing to think 
that a man who is handling harness and driving horses also 
handles your food supply. Furthermore, the automobile deliv- 
ery enabled us to cut down time on long hauls materially, and 
give our entire system the speed of a daily newspaper delivery. 

It will be of interest to know that both our manufacturing 

and distribution plans were working smoothly before we started 

any advertising at all. One of the advertisements con- 

Distribu- tained this explanation of the way to test Ward's 

^Tdvtftis- Tip-Top Bread: "1. Eat it. 2. Analyze it. 3. Rea- 

ifig son it out." The test suggestions, coupled with a 
short, pointed talk on our process of manufacture, was, 
to my mind, the most striking advertisement we ran. Following 
this series there was a big jump in our sales. It was to be ex- 
pected, and right there came in a test for our distribution plan 
which brought out one of its strongest features — namely, flexi- 
bility. In order to supply the trade developed by the advertising, 
our output went ahead by leaps. Sometimes the number of 
loaves covered by a leap was in excess of the number demanded 
by dealers. In such cases we simply sent salesmen into new 
territory and repeated the original process. These men sold 
enough to take up the slack and insure the marketing of each 
day's production of bread the day it was baked. We have 
been expanding our sales system steadily since opening last 
September, but we have not covered New York and Brooklyn 
yet, with suburban New Jersey still in the vista. . . . 

ANOTHER APPLICATION OF ANALYTICAL METHODS 

Xfie Harry Tipper, advertising manager of the Texas 

Factors Qil Company, in discussing the factors in production 
Control the ^^nd distribution which govern advertising does not 
Advertis- push his analysis into as great detail as either of the 
gentlemen previously quoted, but he begins his ap- 
plication of the same idea by setting down a list of items under 



24 ADVERTISING AS A BUSINESS FORCE 

fifteen heads. Mr. Tipper, it will be noticed, goes even back 
of the goods, to the factory conditions themselves. His list 
is as follows : 

* 1. The capacity of the plant involved. 

2. The consumption of the article in question. 

3. The number of competitors in the field; and, consequently, 

4. The total amount of business which can be secured. 

5. The present consumption in relation to the total possible 
consumption. 

6. The increase in the consumption each year during a series 
of years up to the present. 

7. The consumption in the different states or zones which 
may be of interest from a selling standpoint, showing best and 
worst from the total consumption. 

8. This consumption balanced against the square mileage 
involved. 

9. The number of dealers who would handle this article — 
if it is to be sold through dealers. 

10. Present distribution of the material in question. 

11. The present market price of competitive articles. 

12. The total amount of money involved in business, con- 
sidering the consumption. 

13. The total amount of money involved, considering the 
percentage of present consumption which could reasonably 
be expected. 

14. The total profit involved in this amount of business, and, 
consequently, 

15. The total amount of advertising and selling expense 
which could be absorbed in developing the business. 

Commenting on this list Mr. Tipper says : 

It will be seen from this array of the factors entering into 
the case that the advertising manager, in order to be in a position 
to decide on the extent, the method and the reason for adver- 
tising, must be familiar with the conditions from all selling- 
standpoints. Otherwise, the plan of advertising decided upon 
may have only a comparatively small relation to the sales effort 
and conditions. 

It has been unusual, even in the selling department of any 

Printers' Ink, December 28, 1911, p. 10. 



SELLING PROBLEMS 25 

business, to develop all, or nearly all, the factors which arc 
expressed above, and, as a natural consequence, a large amount 
of money is being expended every day in experimentation upon 
a market regarding which the facts are already developed. 

The usual plan in by far the majority of cases where it 

is decided to market a new product is to start a few salesmen on 

what would appear, from a personal impression or 

Danger of general knowledge of the trade, to be the most impor- 

Im7es- ^^^^ markets and feel the thing out in this way. An 

sions expenditure of $20,000 to $50,000 is easily absorbed 
in this experimentation without developing such in- 
formation as would form the basis for an examination into the 
possible efficiency of selling and the possible profit to be secured. 
Personal impressions, even those of one or two men who have 
been brought up in the industry, are easily misled, by appear- 
ances and local conditions through restricted fields, into an 
entirely wrong conception of the market and the methods to be 
adopted in covering such market most efficiently. In working 
out a case a few years ago, the writer was particularly struck 
with this condition. 

The plant in question had a capacity which was considered 
by the experienced sales manager to be quite small. It was also 
. concluded by this gentleman that $15,000 or $20,000 
ase m ^q^\^ |^g spent for advertising this particular out- 
put in addition to the organization of a considerable 
sales force. 

Knowing very little of the trade conditions in this field and 
being impressed with the lack of statistics on the subject, the 
writer made an investigation, which was carefully carried out, 
into the possible market along the lines in which it was pro- 
posed to sell the article in question. 

This investigation showed: (a) that the personal impression 
or judgment of the sales department was utterly at fault and 
that the writer's judgment was equally out of line with the 
facts; (b) that the total consumption of the article in question 
in the field proposed did not absorb more than one fourth or 
one fifth of the capacity of the plant, and anywhere from one 
eighth to one tenth of the amount expected; (c) that the cost 
of the advertising and sales organization proposed would have 
been entirely out of line from the standpoint of possible con- 
sumption within the near future. 

While this was an unusual case, on account of circumstances 



26 ADVERTISING AS A BUSINESS FORCE 

in the industry involved, which made the apparent importance 
of the business much greater than there was any warrant for, 
it showed conckisively the necessity for investigation of the 
trade conditions in order to form a reasonable basis for the 
formation of a selling plan; and inasmuch as advertising is a 
part of the selling plan, the same necessity arose in the determi- 
nation of the extent, method and conditions of the advertising. 

Apart from such an unusual condition as this, the excessive 
cost of selling, due to promotion and sales work, covering fields 
and methods which the consumption of the articles would not 
warrant, has just as much to do with the difficulties in many 
organizations as the over-capitalization of physical properties. 

I have in mind a plant in the Middle West where, although 
the business had increased to the extent of requiring double 
the capacity to fill it, the waste of efficiency in selling and the 
consequent enormous promotion expenses made it impossible 
for this firm to realize sufficient profit to pay a dividend. 

It is well known that usually the expense of marketing 
equals 100 per cent, of all the other factors entering into the 
cost of an article, and in cjuite a number of cases the propor- 
tion is even greater. 

This being so, it is evident that, in order to approach the 
question of marketing any particular material, it is necessary 
that the basic information should be at hand. This should be 
arranged in such shape that an intelligent investigation can 
be made with a view to approaching the marketing of the 
product with a high degree of efficiency. 

It may be contended that the advertising manager, deal- 
^, . , ing with only a portion of the selling ciuestion, 
vertising '^^ ^^t interested in the development of a number of 
Manager these factors. It is true that the development of 
and the most of the factors should naturally fall upon the 

Sa/es head of the sales department; but it is just as true 

anager ^^^^ ^g ^ tvXq, the advertising manager is in the best 
position to make such investigations and secure the information 
along these lines. Except in the notably efficient selling organi- 
zations which stand out as unusual monuments of efficiency, 
the sales manager has been a successful salesman with a turn 
for executive management. For a number of years selling 
has been to him a succession of individual deals and the general 
marketing has been the result of these. 

As a matter of fact, precisely the reverse should be the case 



SELLING PROBLEMS 27 

if the subject is properly approached. The individual deal 
and the success of this deal is the result of an intelligent market- 
ing scheme. 

Furthermore, the sales manager has been commonly limited 
in his viewpoint by the necessity for showing a certain amount 
of sales within a specified period (say six months or one year) 
at a certain percentage cost of selling. This has the effect of 
preventing him — unless he is unusually farsighted — from 
viewing the marketing scheme over a series of years and having 
in view rather the ultimate effect than the balance in his favor 
over a short current period. . . . 

This question of the exact method of procedure in an analysis 
of this kind is a most vital one. It would require an entire 
book merely to outline all the methods of getting data for even 
the most common cases. In almost every line some data are 
available, and others are almost or quite inaccessible. Even 
if all the facts were available, no two advertisers would use 
them with equal skill. Mr. Ward's experience in analyzing 
the New York bread market, for instance, will not be useful 
in toto to anybody else — even a rival New York baker. But 
the fact that he did make such an analysis and the way he went 
at it ought to be suggestive to every advertiser everywhere. 

Not forgetting the importance of the goods nor of the nature 
of the consuming market as factors in determining the advertis- 
ing plan, forms and methods, it is our purpose in this study to 
centre our chief attention on the third element — the distri- 
bution system — and see whether we can pick out some of the 
more salient points in that as they bear on the practical problems 
of advertising. 

REVIEW QUESTIONS CHAPTER I 

1. What did the bean-canner find was the trouble with his 
advertising campaign? (a) In the first investigation? (b) In 
the second? 

2. (a) What are the main divisions of the Fowler plan of 



28 ADVERTISING AS A BUSINESS FORCE 

analysis? (b) Of the Wadsworth plan? (c) Of the Murphy 
plan? 

3. Which of these plans helps you to get the clearest idea 
of your own advertising problems? 

4. How did the Ward Baking Company make sure that its 
advertising would sell bread? 

5. Do you think Mr. Tipper's list of "factors" could be 
reduced? Ought it to be added to? 

PROBLEM QUESTIONS — CHAPTER I 

1. In Mr. Fowler's plan for analysis of the product he has 
a place for profit to various factors in the selhng mechanism. 
What does he apparently mean by this? Gross mark up, or 
net profit? 

2. How does this bear on the advertising plan? For in- 
stance, if a manufacturer of a hardware specialty retailing for 
25 cents could manufacture 100,000 at a cost of 7 cents each, 
and 500,000 at a cost of 5 cents each, what effect would this 
have on his plans for creating demand? 

3. Carefully compare the methods of analysis described 
in this chapter. Choose the elements from each which you 
consider best adapted to your case and work out an analysis 
of your o\\Ti selUng problems as they affect your advertising 
campaign. 

4. Do you think the "Buying Motives" in Mr. Murphy's 
chart include all the motives necessary for consideration? 

5. Suppose that after he had made his first investigation, 
the bean-canner (p. 3) had found that it was going to cost him 
$200,000 to reach the 80 per cent, of his market hitherto un- 
touched, what new elements would this discovery make it 
necessary for him to consider? 



CHAPTER II 

THE DISTRIBUTION SYSTEM 

DISTRIBUTION for retail consumption calls for two 
main steps between the producer and the consumer. 
The first is the step by which the product is moved 
in bulk to large distributing centres and there held ready for 
The Two ^^^® ^^ dehvery to the type of house engaged in per- 
Stefs in forming the second step. This work may be done in 
tion\or ^ single move, or it may involve a series of transac- 
Retail tions — all performed, however, at wholesale. The 
tion^-^the performers of this work are variously known as whole- 
Whole- salers, jobbers, or by other names in some trades 
*" ^'^ where their methods involve a certain amount of 
consigTiment business. The large term "Middleman" covers 
them all. Their services are primarily commercial rather 
than productive. Furthermore, these services are difficult, 
somewhat hazardous, and when the producers are highly 
localized and the retailers small and scattered, these services 
are undeniably necessary, and call for special equipment and 
skill. 

The second step in distribution for retail consumption is that 
by which the goods, divided into small units, pass out of trade. 
The Place "^^^^ retailer, who performs this service, needs no ex- 
of the planation. This brief summary blocks in the main 
^ "^ ^^ steps in distribution of goods selling at retail, but in 
few cases is the actual situation as simple as this. It is the 
main object of this compilation to show how necessary to 
the advertiser is an adequate appreciation of the actual con- 
ditions in distribution; in other words, an understanding of 

29 



30 ADVERTISING AS A BUSINESS FORCE 

what is involved in the relations of the parts of the modern 

distribution mechanism to each other. 

If conditions of life were stable, if cities were not growing 

larger and more numerous, if transportation facilities for goods 

and people still kept retail trading units small and 

The Chaos isolated, this two-parted system of distribution would 
m Distn- , . 1 /T T. 

hution be working away without conflict or trouble. But 

the real conditions are quite the reverse of this 
imaginary combination, and as a result some retailers grow 
large and become independent of the wholesale distrib- 
utors, while others remain small and still need the services 
of those functionaries. Some wholesalers, too, change their 
position by undertaking manufacturing or retailing or both. 
And as a result, the whole system of distribution for goods 
consumed in small units is in an unsettled state. 

Advertising, as an influence aimed at consumer direction 
and control, is obhged, at every turn, to face some expression 
of this conflict, and a firm grasp of the more important features 
of the situation is essential to advertising success. No matter 
whether the advertising be undertaken by the producer who 
attempts to modify the whole distribution plan for his goods, 
or by the middleman or retailer who deals with only a part of 
the system, the need is equally urgent. 

Under the title of "The Mix-up About the Jobber," a series 
of articles by Raymond W. Gage appeared in 1910 which give 
a statement of some phases of the conflict. {Printers' Ink, 
August 11, 1910, p. 8; August 18, 1910, p. 11; September 22, 
1910, p. 29.) The following paragraphs are taken from these 
articles. 

THE STATE OF CHAOS 

*The jobber is one of the very stiflest problems facing manu- 
factures. . . . 
What is the trouble? 
Ask this question of the manufacturer, the jobber and the 

* Printers Ink, August 11, 1910, p. 8. 



THE DISTRIBUTION SYSTEM 31 

retailer successively and you ascertain the "other fellow is to 
blame." 

"If," says the manufacturer, "Jones, the jobber, hadn't put 

out his private brand, in competition with mine, I wouldn't 

have had any fault to find. He's pushing his own 

^^f p^T* goods and at the same time handling mine. He won't 

Step ^^t ^^^ know where my own goods are for sale, for 
fear I'll go over his head to the retailers. Conse- 
quently, between inability to stimulate and help my dealers, 
and the jobber naturally pushing his own brand in preference, 
I'm up a tree, and I'll go direct to the retailer, if he doesn't 
come to time." 

"If," says the jobber, "Martin, the manufacturer, hadn't 
cut me out and gone over my head direct to the retailer, I 
wouldn't have put out my private brand." 

"If," says the retailer, "Jones, the jobber, hadn't gone also 
into the retailing business I'd not have accepted the direct 
prices of the manufacturer and wouldn't have gone into the 
field of wholesaling, too." 

The jobber, the manufacturer, and the retailer are interchang- 
ing functions. Park & Tilford are retailers, with a chain of 
stores, as well as jobbers. Francis H. Leggett & Co., 
The Inter- ^f New York, are becoming advertising manufacturers 
Functions ^^ Premier products, as well as jobbers. Here are 
two jobbers reaching both ways, causing dissatisfaction 
to the manufacturer and the retailer alike. 

The manufacturer, in order to have a finger in the messing up 
of the situation, has been known not only to go over the jobber, 
to the retailer, but also to jump at once to the consumer. An 
example is Browning, King & Co., clothing manufacturers and 
retailers, in fifteen cities. 

Of course, the retailer couldn't stand all of this meekly. 
So, we see in the James Butler string of grocery stores a retailer 
who demands jobbers' prices of the manufacturer and who is 
even doing some of his own manufacturing. Marshall Field 
& Co., of Chicago, do a large jobbing business. Wanamaker's, 
of New York, has just organized a wholesale department. All 
these were at first retailers. 

It is easy enough to see why this taking one of another's 
functions should be regarded as something of more than aca- 
demic trade interest. As a matter of fact, it is a profoundly 
vital condition. 



32 ADVERTISING AS A BUSINESS FORCE 

If James Butler can buy groceries direct from the manufac- 
turer at jobber's discounts, how can the Httle retailer on the 
The Large corner, who is strictly minding his own business as 
vs. retailer, possibly compete? Butler can sell his goods 
the Small at prices that are "cost" to the little fellow. And the 

Buyer Yi\x\q fellow must live. He, therefore, is doing his 
part in stirring up the dust and, by association with other 
little fellows, putting himself on even buying terms with 
Butler. Those department stores that get jobbers' discounts 
are also regarded as just as full of threat to the retailers' busi- 
ness. 

For their part such enterprises as those of Butler grit their 
teeth, mutter something about "competition of jobbers" and 
"survival of the fittest." Indeed, the department stores, 
Butler, et al., insist that they must have the jobbers' discount 
or they can't do business in competition with the retailing 
jobber. Macy's, or Saks', or Marshall Field's, or the May 
Department stores seem to have some justification in their 
explanation in view of the invasion of the retail field by the 
powerful H. B. Claflin interests. . . . 

It is a battle of giants, and the little fellow, buying without 
any discount, can only sense the lump in his throat and grab 
at the crumbs of patronage that are thrown his way. If it is 
going to be his fate to be blotted out, he must get such comfort 
as he can from the fact that he went down in a pitifully unequal 
conflict, not with men, but with natural economic forces that 
tend to crush their path to the consumer by the shortest and 
the cheapest route. 

And above all looms the manufacturer. Altogether he is 

the strongest factor in the fight. If he is an advertising manu- 

facturer (and it is the advertising manufacturer we 

Manufac- ^^^ considering) he rules the situation, in the last 

iuj.gr analysis. He has made his goods known, through 

His their trade-mark, to consumers. He is the maker of 

Troubles \\^q things which this country eats, wears, sleeps on. 

Solution P^^y^ with, and works with. Demand is the voice to 

which all listen, and substitution can only make a 

feeble effort to resist or modify it. 

The manufacturer in many cases is acting the jobber for 
himself. Heinz's 57 Varieties don't get on to pantry shelves by 
the jobber road. They go from manufacturer to storekeeper. 
So with Kirkman's soaps, so with much trade-marked clothing, 



THE DISTRIBUTION SYSTEM 33 

so with National Biscuit; so, to some extent, with Armour & Co. 
and their canned goods. And these are only a few. 

But, as a rule, it is certain that most manufacturers would 
prefer to sell through the jobber to any other method. It 
saves them having direct relations with thousands of retailers. 

To be sure, there are some specialty manufacturers who 
would sell direct to the retailer, whatever the conditions. 
Heinz, with his distributing stations and salesmen, is in position 
to put his pickles into the hands of the groceryman very quickly 
and therefore in a fresh state. Also, the National Biscuit 
Company's crackers and wafers don't tarry on their way so 
long from manufacturer to retailer direct as they would if they 
had a jobbing house as a relay station. 

But the fact that some companies have tried relations with 
the retailers and got sick of it is proof of the general feeling. 
The Columbia Conserve Company is an example. Yet one 
who is prone to argue the case for the jobbers' elimination can 
dig up strong points. The Lisk Manufacturing Company, of 
Canandaigua, N. Y., maker of enamel ware, has been doing 
a direct-to-retailer business. It has 25,000 accounts, it is 
stated, and is in a most flourishing condition and well satisfied 
with itself. 

Many jobbers have grown to wealth in the course of years. 

After a generation or two of often absolute control over the 

retailer it would perhaps be expecting too much to 

^^'! P/"*^^ have them all renounce their claims to supremacy still. 

""of t)^^^ Complaints arise from many quarters that the jobber 

Jobber is too dictatorial, that he ought to be shown that he 

is not the indispensable fellow he thinks he is. 

But efforts to oust him are as certain as fate to be fought 
bitterly and skilfully. Some jobbers possess the retailers, body 
and soul. Small storekeepers, and sometimes the larger ones, 
have been advanced goods by the jobber until the jobber really 
owns them. In what position are such retailers to put up a 
restraining hand to the domineering wholesaler? 

Entrenched with capital and influence with the trade, the 
jobber is also a dispenser of business to the manufacturer. 
Not the advertising manufacturer, usually, but that other who, 
hungry for orders, snaps up avidly a commission to make for a 
jobbing house a line of private brand goods. 

Such manufacturers frequently find themselves in trouble. 
Not long ago a manufacturer of edged tools received a noti- 



34 ADVERTISING AS A BUSINESS FORCE 

fication from a certain jobber that the latter would not renew 
his contract for the private brand goods. The manufacturer had 
been making these from time out of mind and the future 
seemed rosy. He had been getting only a small margin of 
profit, but he had made money. With his one customer gone, 
what could he do.^* His goods had not been advertised and he 
had no standing with consumers. The jobber had not only 
taken the goods but also the credit, among the trade, for the 
product. That manufacturer had a very painful half-year. 
But he has learned his lesson, for he is now advertising and is 
establishing himself with the general public, which is not 
liable to drop him a curt note and take away his market be- 
tween the time he opens his desk and the hour he goes to 
lunch. . . . 

*A jobber that has private brands to sell in competition with 
those of houses that advertise must walk a very straight line 
to avoid falling under the suspicion of the manufacturer. 
Some jobbers hate protected prices. Dickering and trade 
deals and secret bargains have been the rule so long in former 
days that jobbing houses which are in a rut cannot understand 
the spirit of the new era. Some of them will go to shameful 
lengths to undermine the sales of a widely advertised brand. 
But manufacturers like Procter & Gamble, the Shredded 
Wheat Biscuit Company, Kellogg's Toasted Corn Flake Com- 
pany and the Cream of Wheat Company, who have got their 
fighting spirit up, are making things unpleasant for those 
jobbers who are "putting sand into the gear box." 

Jobbers and those who buy at wholesale discounts often strike 
viciously to uphold old practices. The Kroeger Grocery & Bak- 
ing Company, of Cincinnati, became peeved because Procter & 
Gamble wouldn't sell Ivory Soap to them at a discount and 
threatened to build their own soap plant, evidently expecting to 
get the Ivory Soap people "on the run" right away. This is 
similar to the alleged threat of Austin, Nichols & Co., New York 
jobbers, to start a cereal plant to make Toasted Corn Flakes 
because Kellogg refused to make them preferred buyers. Austin, 
Nichols & Co. cannot now obtain Kellogg's Corn Flakes, nor can 
Francis H. Leggett & Co., of New York, another wholesale 
house. Austin, Nichols & Co., have made good in part their 
threat by taking on Doctor Kellogg's Toasted Rice Flakes and 
"boosting" them for all they are worth through the trade. 

*Printers' Ink, August 18, 1910, p. 11. 



THE DISTRIBUTION SYSTEM 35 

There has been a hot fire of form letters from both the W. K. 
Kellogg Company and from Austin, Nichols & Co. upon the 
retailer, as a result. Concealing the anger he must have felt, 
W. K. Kellogg has been treating the matter in a humorous 
way, trusting to his price policy, his reputation in the trade, and 
the consumer demand to carry the day for him. . . . 

The situation in the grocery specialties field is not essentially 
different from that in most of the other lines of trade. An 
authority in the jewelry field in New York predicted that the 
jewelry jobber would be out of business in five years. The 
* * * * goods lend themselves readily to mail shipment 
direct to the consumer or a straight delivery to the retailer. 
One influence that may keep the jewelry jobber doing busi- 
ness in spite of predictions is that the average retail jeweler 
cannot use the quantity of merchandise which would enable 
him to buy direct of the manufacturer. A stock of jewelry is 
tied up for a relatively long time in the retail shop, and a direct 
buying is often rendered difficult from the inability of the re- 
tailer to command sufficient capital. 

Manufacturers of goods that bulk large do not predict the 
extinction of the jobber. The jobber is deemed to be a neces- 
sity as a distributor. But what manufacturers will bend all 
their energies to remedy is the backwardness of the jobber in 
rendering the fullest possible co-operation. . . . 

THE CAUSE OF THE TROUBLE 

*The whole mix-up has been caused by the attempt of some 

manufacturer or wholesaler to cut out one or more steps in the 

old-time distributive process, which was from manu- 

r^^^ff i° facturer to jobber, to retailer, to consumer. The con- 

gigjj sumer holds the key — he will buy where he can get 
the best goods cheapest. While this tendency is one 
of the most natural in the world, it has developed strife and 
ill-feeling to a remarkable degree. Caught in the swirl of 
changing trade currents, every factor concerned has at times 
turned upon another, accusing it of being at the bottom of the 
whole trouble. 

But companies which have spent many years in establishing 
selling policies are not able to change them over-night. They 

^Printers' Ink, September 22, 1910, p. 29. 



36 ADVERTISING AS A BUSINESS FORCE 

must adapt slowly and change selling habits with exceedingly 
farsighted eyes. 

Thus the jobbers are finding themselves bulwarked by sev- 
eral very important and powerful manufacturers. The lat- 
ter are not ready to change the channels of distribution — it 
would throw their business into confusion. 

One overshadowing concern marketing its product through 
the jobber has done yeoman's work in trying to give stability to 
a situation which economically is tending to a gradual 
Different change. The change looks to the elimination of the 
Toward jobber or the lessening of his functions. This con- 
the Jobber cern is the Diamond Match Company, which is said 
to control 90 per cent, of the match trade of the 
United States. It emphatically insists upon price-mainte- 
nance and upon selling through the jobber. It is interesting to 
note that the Diamond Match Company believes in the "free 
deal," for its policy has been to give one case free for every ten 
ordered; lately, because of competition in certain districts, it is 
giving one case free in five. By countenancing this practice it 
sets itself in opposition to the Kellogg Toasted Corn Flake 
Company, which sells as cheaply to the small buyer as to the 
big one. Fred Mason, assistant sales manager of the Diamond 
Match Company, says he cannot see the wisdom of adopting a 
policy which would lose for him the services of 70,000 jobbers' 
salesmen. It is his policy not to sell to the big retailer or the 
chain store direct; indeed, he has found that only 15 per cent, 
of the total supply of matches is sold through chain stores or 
buying associations. 

The Babbitt Soap Company also believes in the quantity 
buying price. It has a price for 100 cases, for fifty cases and 
for twenty cases. There is a strong feeling abroad in the trade 
that the quantity prize will prevail, and that Kellogg's fixed 
price policy is unnatural. One man active in a state retail as- 
sociation asked if Kellogg bought on the same principle, or 
whether he demanded a lower price on his cartons the more he 
bought. He said that Kellogg himself bought according to one 
plan and sold according to another. Furthermore, he felt that 
the sooner the leaders could unite upon some common-sense 
principle in accordance with reason the quicker a confused 
situation would right itself. One notable thing about the 
jobber's mix-up is the convincing quality of the opinions held 
by the opposing forces. 



THE DISTRIBUTION SYSTEM 37 

THE DILEMMA OF THE RETAILER 

Mr. Gage's summary of the situation makes it clear that, while 
the "mix-up" may be primarily about the jobber, the retailer 
is by no means free from worries. As a matter of fact it is a 
serious question whether the jobber or the small retailer is in the 
worse strait. 

The dilemma as it bears on the grocery retailer is described 
in an article in Advertising and Selling, which contains a serious 
truth in a somewhat jovial exterior, and while the retailer's 
position may be different in various trades, the troubles of the 
grocery man are suggestive of what is to be found in many dif- 
ferent lines: 

. . . . *Take the retail grocery trade the country over 
and find the fortunes made in it compared with other fields 
of retail endeavor. There are more second and 
Trade"in ^^^^^ generations driving automobiles and playing 
Which Few polo because of success in drygoods and hardware re- 
Fortunes tail merchandising than in the retail grocery business. 
^"^M ^/^^ Why is it.f* Well, there are reasons aplenty, and 
" ^ maybe as important a one as any is the fact that the 
retail grocery business is wofuUy overdone. A successful retail 
grocer must be a very intelligent merchant. He must be a 
careful buyer and an equally careful seller. Of course that 
applies to every business that prospers, but in a grocery busi- 
ness where many profits are small and individual sales small 
too, with cut-rate prices until the merchandise fairly bleeds, and 
with a delivery system which greatly increases the overhead 
expense, the retail grocery sometimes does well to break even. 
What has all this to do with advertising.? you ask. Well, it 
has a lot to do with advertising, and, in the first place, more to 
do with selling. The retail grocer is the natural dis- 
Adverhsed tributing outlet for the food products advertised so 
the Retail generously in the standard and women's magazines of 
Grocer the United States. The retail grocer is in most cases 
a very important link in the manufacturer's chain. 
The food specialty producer usually sells to the jobber, who in 

*"How Would You Like to Be a Groceryman?" ByWalter Bernard Cherry, 
{Advertising and Selling, June, 1910, p. 59). 



38 ADVERTISING AS A BUSINESS FORCE 

turn supplies the retailer, and the retailer takes care of the 
consumer. The manufacturer's dealings with the jobber are 
greatly facilitated because the wholesale grocery trade is per- 
haps the most healthful of all jobbers. But the retailer takes 
long chances on credit and carries a multiplicity of items which 
increase his investment and sometimes fail to help his profits. 

The specialty manufacturer of food products with a national 
distribution naturally turns to the advertising mediums of 
national circulation for his publicity. He tells his story to the 
enormous magazine-reading public in a maximum way for a 
minimum cost, all things considered. Naturally the specialty 
manufacturer's distribution is first to be considered. There are 
approximately 240,000 retail grocers and general storekeepers 
in the United States. General stores usually carry groceries. 
Of this total, 190,000 grocers and general stores are in the small 
cities, and 50,000 stores in the larger cities. The sale of food 
products over the grocer's counters is naturally regulated by the 
available public, and it is a well-known fact that some food 
products sell better in the smaller cities than in the larger cities. 

When a manufacturer's distribution of his specialty is com- 
plete, and a representative number of retail grocers have stocked 
the goods through the jobbers, the manufacturer's national 
advertising campaign starts. It naturally produces business 
because we assume the product is right and is subject to a 
natural demand, logically increased by publicity and the very 
quality of the merchandise. Mr. Advertiser's campaign may 
be tremendously effective in his mind and in his agent's mind, 
and yet it is a very difiicult problem for both principal and agent 
to solve, when heavy space is bought in the big magazine of 
one million circulation which goes everywhere and must help 
the sale of this piece of merchandise wherever it is stocked. 
But how much does it help? Who can tell.' . 

We might liken the general publicity for a food product stock 
in 240,000 retail outlets to the firing of a locomotive. We can 
never tell which single ad in a national magazine campaign sells 
one or ten packages of None Such Mince Meat in Kankakee, 
Keokuk, Kokomo, or Kalamazoo, but we know the goods sold, 
and that's the answer. We cannot tell which shovel of coal 
heaved into the furnace of No. 3972 took the flying Empire 
State Express any single mile between Syracuse and Utica ; but 
we know the train moved, and we know if we took out some of 
that national magazine campaign, we would be very apt to feel 



THE DISTRIBUTION SYSTEM 39 

it in our sales; and we also know that if Mr. Fireman became 
peevish and stingy with his coal old 3972 would ease off and 
begin to touch some others than the high places on her 
journey. . . . 

But how about the grocery man.? Have you ever been in a 

grocery store and counted the various brands of merchandise 

he carries .f* Shut your eyes and think of a grocery store 

The you know. I will warrant that on that grocer's shelves 

National ^^ ^'u gj^j fifteen kinds of cereals, twelve sorts of 

ing of soap, six different brands of baking-powder, many 

Groceries varieties of extracts, tinned soups, fish and other 

Deter- edibles. . . . Do all these various brands sell in 

^ar7 r'^^ equal proportions.?^ Hardly that. The advertised 

Stock brands sell, and the retail grocers tell us that the 

Selection brands whose advertising is continuous, consistent 

and everlasting are the steady, plugging sellers and 

are most often called for by brand name. 

Mr. Cherry's article brings out clearly one of the many phases 
of the present disturbed condition in one branch of retail busi- 
ness. The effect of national advertising on the retail grocer's 
stock is only a surface indication of a radical change wrought by 
this single form of advertising on the whole selling system. 

THE retailer's STRATEGIC POSITION 

Another aspect of the retailer's position is presented by 
George L. Louis, of Chicago, in an article in System. Mr. Louis 
takes the ground, that while th,e retailer may be in trouble, his 
place in the distribution system is the vital one, and that the 
solution of the present strained condition lies, not in the elimina- 
tion of any part of the present distribution system, but in more 
careful planning and better co-ordination of the various ele- 
ments of distribution. This is, in a large measure, the work of 
the advertising man: 

*Many manufacturers have been led to assume . . . 
that the " created demand" . . . will close sales and pre- 

*System, June, 1912, p. 584. 



40 ADVERTISING AS A BUSINESS FORCE 

vent substitution. The demand of the consumer is, it is 
claimed, the pivot upon which distribution revolves, and this 
consumer's demand alone is sufficient to bring about the co- 
operation of the dealer. 

What is commonly termed "created demand" is, in my opin- 
ion, no more than a primary selling influence. In itself it is not 
sufficient to make sales. Psychologists tell us that sales are 
made by a process of elimination; the consumer does not argue, 
"Why I should buy," but questions, "Why should I buy?" 
Advertising that starts this reasoning is only a preparation; 
something more tangible than printed words or pictures must 
be added to complete the sale. 

In a series of one hundred instances where consumers were 
watched to note how and why they bought advertised goods, 
eighty-three couched their first question, "Have you so-and-so.^ " 
and seventeen, "I want so-and-so." This shows the attitude 
of the average purchaser when entering a store with the intent 
to buy. The question "Have you so-and-so?" is a lead for the 
merchant to put forth his final and necessary sales force. The 
consumer is simply in an interrogatory attitude. 

With his direct contact, his personal influence, and his final 

y^g selling talk, the retailer is the power that concludes 

Retailer sales. The influence of the retailer in intimate 

Concludes touch with the consumers is far greater and more ef- 

the Sale fective than that of a distant manufacturer whose 

appeal is by means of the printed word alone. 

No matter how successful selling by threat may have been — 
with the consumer as the innocent wielder of the "big stick" — 
the retailer to-day knows his power. He is no longer susceptible 
to anything but the direct approach, with goods and prices as 
the selling basis. This does not mean that he does not recognize 
and appreciate the wonderful aid of a selling campaign directed 
by the manufacturer at the consumer. But it means that such 
a campaign as a selling force from the manufacturer must 
follow the goods and not precede them in importance. 

In order to verify the conclusion that the dealer is the court of 
last resort, to whose influence the consumer is more susceptible 
than he is to that of the advertising manufacturer, the experiment 
was made of submitting substitutes for a number of widely ad- 
vertised articles now before the public. A list of the best known 
advertised goods, clothing, shoes, toothbrushes, saws, food 
products, soap and furniture, was used as experiments by re- 



THE DISTRIBUTION SYSTEM 41 

tailers in various lines for my benefit. Without one exception, 
each substitution was easily efiFected. I was rather startled at 
the ease and quickness with which it was done in all instances. 

For example, a woman who had been a patron of a certain 
grocery store for many years, and who at regular intervals 
ordered a dozen bars of a well-known advertised soap, gave 
a list of the items she desired to the proprietor of the 
Substitu- store. When she mentioned the soap he produced an 
tion Is unknown brand and quietly said: "Try this instead of 
the that, Mrs. Brown; it's just as good." ^ Mrs. Brown 
Retailer looked at him curiously for a moment as if surprised at 
the suggestion, met his firm, assuring glance, then 
answered, "All right." The dealer did not argue or say any- 
thing detrimental to one soap or in favor of the other. 

The consumer — the final purchaser — is in direct contact 
with the retailer. To distort conditions and attempt to in- 
fluence the consumer directly without the co-operation of the 
dealer is to describe a circle instead of a straight line in securing 
maximum sales at minimum cost. 

Yet we cannot ignore the fact that the influence of the manu- 
facturer's selling effort is a tremendous factor in selling goods, 
and that it minimizes the effort and energy of the retailer in 
closing sales. 

An analytical survey of the change which national advertis- 
ing has brought about leaves no question of its value to both 
the manufacturer and the dealer. If the grades of 
What Ad- merchandise made and sold fifteen years ago be com- 
H^as^Done P^^red with present qualities, a startling difference 
will be found. And when we compare household 
equipment now in common use with that of previous years — 
electric washers, player pianos, sectional bookcases, and the 
like, with their progenitors — an even greater contrast is seen. 

Now the cause for these changes cannot be traced to con- 
sumer initiative, nor can the dealer be credited with them. 
The educational work which inspired the final buyer to appre- 
ciate the betterments has been almost wholly on the part of the 
producer and wholesaler. 

A large clothing manufacturer, discussing this angle of the 
question, called attention to a ledger of 1896, which showed that 
the clothes bought during that year averaged from six to twelve 
dollars per suit. There were few fifteen, eighteeen, or twenty- 
dollar sales. The preponderance of sales during 1911, on the 



42 ADVERTISING AS A BUSINESS FORCE 

other hand, ranged from eighteen to twenty -five dollars. In 
similar fashion, a corset manufacturer sold chiefly twenty -five, 
thirty-five, and seventy -five cent models eight years ago. To-day 
he does not manufacture any model to be sold under one dollar, 
and the majority of his sales are from three to five dollars. A 
maker of toilet preparations has so changed his lines that he 
appears to be running an absolutely different business. High- 
grade dental and face creams, talcum powders and toilet soaps 
now form the bulk of his output. 

The manufacturers and the retailers who sell their products 
agree in attributing the change in consumer buying to one 
cause — advertising. In studying consumers, therefore, and 
learning how and why they buy, we must not lose sight of the 
advertising manufacturer and the effect which he has had and 
is still having in stimulating desire for and appreciation of 
quality goods. 

The fact that the manufacturer can thus influence buying, 

„, rj, however, does not justify exclusive attention to the 

Forces consumer. With the educational force of the manu- 

Which f acturer and the intimate selling power of the retailer 

Need To working together, we have the combination which 

^f. ^°'j promotes maximum buying. If either fails to consider 

and co-operate with the other, "problems" begin 

to arise — the manufacturer's problems, dealer problems, and 

consumer problems — which make waste wherever they appear. 

When the manufacturer bids for the consumer's attention 
directly for the dealer, consumer buying can be wonderfully 
promoted. This is amply illustrated by the recent change in 
policy of a large concern which makes medical supplies. This 
house advertises extensively. Its copy has, until recently, 
terminated with a coupon request that entitled the sender to a 
sample of its products which was sent to the inquirer from the 
factory. Then the name was used as a weapon upon the drug 
store of the town from which it came to show a demand. The 
effect of this method upon dealer and consumer was never 
satisfactory. Some three months ago the firm tried a new 
method. Dealers were liberally supplied with samples, and the 
advertising directed the public to go to the local drug store and 
get them. The sales to dealers and from dealers to final buyers 
have tripled since. 

The consumer of the city presents a problem different from 
and more difficult than those of the small town. The environ- 



THE DISTRIBUTION SYSTEM 43 

ments are different, the influences are different and the results 
are different. The selling effort in the metropolitan centres 
has been so intensified that it is always at a white 
City Yi° heat. Therefore, the buyer has become more or less 
Difficult calloused to the appeal, and is much less responsive 
than his small town brother. The city buyer shops be- 
fore purchasing. This shopping may cover weeks before final 
action is taken. I know of one woman who visited six stores 
to examine and compare dress-goods values, and, finally, after 
two weeks' deliberation over the samples collected, returned 
to the first establishment and bought. 

The department stores are mainly responsible for the high 
tension in buying in the cities. Few of the big department 
stores spend less than $100,000 yearly in newspaper adver- 
tising alone, and many spend that amount in a single paper. 
The tremendous force of daily pages and frequent double pages 
of department store newspaper advertising has reduced the 
effect upon the consumer of the manufacturer's advertising 
campaign very materially. 

By eliminating the trade-marked name in their selling, the 
department stores have driven in a separating wedge that has 
made them independent of the manufacturer. Three women 
were given a list of twenty advertised articles to purchase at a 
department store in Chicago. Of that number they returned 
with only three; in place of the other seventeen they were all 
offered "our brand which we ourselves manufacture." 

The buyer in the small town is thrown into an intimate 

contact with the store and its proprietor which is absent in 

our cities. The more or less uninterested clerks of 

The Buyer ^^le big stores are a barrier to anything but a similarly 

Small mechanical selling and buying method. This elimi- 

Town nates emotion from buying and makes it a cold 
reasoning process, and, consequently, a harder and 
longer process. 

To stimulate selling in cities by means of inquiries from 
consumers in the manufacturer's national campaign is a farce. 
Inquiries and coupons presented to clerks in larger stores are 
usually met with a cold negative and seldom if ever reach the 
buying head of a department. As an experiment, I made 
twelve inquiries at one department store in accordance with 
the suggestions in twelve manufacturers' advertisements. I 
was told at each counter, "We don't carry it, but we have our 



44 ADVERTISING AS A BUSINESS FORCE 

own special brand." Eight of these special brands were traced 
down and found to be the manufacturers' goods that had been 
advertised 

The excerpts presented in this chapter have been chosen 
with a view to making clear four points which are to be 
elaborated in subsequent discussions: 

(1) Distribution of goods for retail sale is in chaos, due to 
the interference with one another of the various steps in the 
old or "regular" distribution system. 

(2) Much of this confusion has grown immediately out of 
attempts to control trade tlirough appeals to the consumer. 
The man who can control the consumer-demand is always in 
the strategic position. 

(3) Of all the distribution factors, the retailer is most 
favored by natural conditions, since he is the channel 
through whom the consumer-demand once created is con- 
verted into business. 

(4) While the retailer has the best natural position, the 
other factors in the distribution system, the producer and the 
middleman, are by no means weaponless, nor are they think- 
ing of surrender. 



REVIEW QUESTIONS — CHAPTER II 

1. What are the two main steps in the distribution of goods 
for retail consumption.'^ 

2. Why is there trouble in the system? 

3. What are the troubles of (a) The Manufacturer? (b) 
The Jobber? (c) The Retailer? 

4. How does this conflict in the distribution system affect 
national advertising? 

5. How does national advertising influence stock selection 
by the retail grocer? 

6. If the retailer has an advantage in his ability to "sub- 



THE DISTRIBUTION SYSTEM 45 

stitute," why does he allow himself to be driven to handle so 
many lines? 

PROBLEM QUESTIONS — CHAPTER II 

1. How do you account for the rise of the "big" store in the 
dry goods and ladies ready-to-wear trades? 

2. Are the same causes back of the chain-store development in 
groceries and drugs? 

3. Taking into account all the efforts being made to educate 
consumers, and influence jobbers and retailers, and the growth 
of trade-mark and brand advertising and price maintenance, 
would you say that conditions were better or worse for big 
store and chain store development to-day than they were 
twenty years ago? Give reasons in full. 

4. What do you think of the future of the small dealer in 
the drygoods, grocery and drug lines? 

5. To what extent are conditions the same in the hardware 
business as in these other trades? What would you think of 
a chain of hardware stores as a business proposition as compared 
with a chain of grocery or drug stores? 

6. Would you say that a manufacturer's national campaign, 
advertising sheetings to the consumer, would be easier, or more 
likely to give results than under present conditions if the retail 
dealers handling the goods were all small as they were thirty 
years ago? If there were no small dealers left what would be 
the case? 

7. If you were planning an advertising campaign for a scour- 
ing compvound for enamel tubs, basins, etc., to be sold both by 
grocers and hardware stores, which outlet would you give most 
weight in your plans? Would you expect the same plan to 
cover them both? 

8. Mr. Gage in discussing the disorganization of the dis- 
tribution system says in one place that the manufacturer is 
"the strongest factor in the fight," In another place he says: 
"The consumer holds the key." Mr. Louis says: "The 



46 ADVERTISING AS A BUSINESS FORCE 

retailer is the court of last resort, and the retailer knows his 
power." Mr. Cherry, on the other hand, seems to think that 
the retailer (in the grocery trade, at least) is obliged by modern 
conditions of trade to do a complicated business at small 
profits, and that in this he is more or less helpless. Are these 
men all talking about the same conditions? Is there any way 
to reconcile their statements? 



CHAPTER ni 

THE RELATION OF ADVERTISING TO THE DISTRI- 
BUTION SYSTEM 

WITH this brief discussion of commercial analysis 
applied to advertising problems, and this summary 
of some features of the disturbed state of the retail 
distribution system, we face two specific questions: 

(1) How can the advertiser who must sell through this dis- 
ordered system determine what he wants to do to his market? 
and 

(2) Having chosen his desired ends, how is he to set about 
attaining them? 

In April, 1912, Clarkson A. Collins, Jr., Manager of the Plan 
and Copy Department of the Collin Armstrong Advertising 
Company, of New York, contributed a series of articles to 
Printers' Ink under the title "What To Do Before Advertising." 
In the first of these Mr. Collins says: 

. . . *A salesman can sell goods at a profit in spite of a 
faulty sales plan, a cheap package, a poor letter-head; in spite of 
a hundred different errors, any one of which might well spell 
death to the success of an advertising campaign. 

There is no waste in a salesman's work. He goes always 
to a possible buyer. Out of a thousand reproductions of 
an advertisement only one may reach a possible 
Waste buyer. And when the possible buyer is reached the 
Alotion m gpoken word is always more effective than the 
ing written. The spoken word meets an objection in- 
stantly. The written word may never meet it. The 
spoken word is reinforced by a smile, a gesture, the clasp of 
a hand . The written word has nothing but itself. 
*Printers Ink, April 4, 1912. p. 3. 

47 



48 ADVERTISING AS A BUSINESS FORCE 

Since advertising in any form does entail this tremendous 
waste, the manufacturer who intends to advertise should put 
his house thoroughly in order before spending a dollar on the 
written word. Only by so doing can he hope to receive the 
greatest results possible from his advertising. 

The average manufacturer is more of a maker than a seller. 
As a result there is usually much to be put in order in the sales 
side of his house, the side that deals with human nature, not 
with machines and materials. 

And it is with the sales side that I shall treat, taking for 
granted that the manufacturing side is in order, that the manu- 
facturer is turning out at the lowest possible cost an article 
which performs in the best possible way the purpose for which 
it is made. 

The manufacturer who would advertise must consider care- 
fully the following factors, making changes and corrections 
when necessary and possible, in order to do away with every 
ounce of friction that is going to retard or perhaps wholly de- 
stroy the success of his campaign: 

I. The Article. Is its appearance attractive otherwise? 

Seven ^^' '^^^ Name, Is it easy to remember and 
Things for pronounce? Can it be protected? 
the Adver- III. The Package. Is it attractive in appearance? 
User to Is it convenient in shape and size? Does it lend itself 

onsi er ^^[1 to display on the dealers' shelves? 

IV. Prices. Are the profits to the trade too high or too low? 

V. Distribution. Is it concentrated or scattered? Will it 
dovetail with an efficient advertising campaign of any kind? 

VI. Distinctive selling points. Are there any? Can they 
be created? 

VII. Business Stationery. Is it attractive and distinctive? 
I have seen most of the principles implied by the above 

questions violated without apparent material harm by success- 
ful manufacturers — non-advertisers. I have also seen the 
non-adherence to any one of these same principles constitute in 
itself the rock upon which an advertising campaign, otherwise 
successful, has been wrecked, or at least had its power greatly 
impaired. . . . 

The appearance of an article has about as much effect 
upon sales made by the spoken word as upon those made by 
the written word. If it is well designed and looks efficient, 
it will sell better than a competing article that has not these 



RELATION OF ADVERTISING 49 

attributes. Logically, however, this is a point on which a 

manufacturer should reach perfection before selling work of 

any kind is attempted. There is absolutely no excuse 

I. TJie fQj. the short-sightedness or ignorance on the part of 

^■f A - i^ia^'^y manufacturers which makes it necessary for 

pea ranee ^^^ advertising manager or agent, coming into the 

game after it is started to change the appearance of 

an article he is to advertise. 

The mistakes made in christening articles of merchandise 

are innumerable. It would seem that most manufacturers, 

in selecting a name for some child of their brain, 

Rff fj°"''^ open a dictionary, a Bible, or any other book that 

N^an^ie^"^ comes handy and pounce upon the first word that 

Selection catches their eye. When this is not the process the 

names of competing articles are gone over and 

another name as nearly like the rest as possible is originated. 

Among sweeping compounds, the manufacture of which is 
a comparatively new industry, are to be found the following 
names : 

Nodust 
Nomordust 
Dustbain 
Death-to-Dust 
Dustroy 
Kildust 
The packages for these different sweeping compounds, al- 
though alike in general shape, differ in color. 

Let a woman be sampled with one of these compounds, let 
her grocer make a sale over the counter, and the chances are 
that thereafter she will be able to distinguish her particular 
compound by the color of its package. Her dealer will not be 
able to give her a substitute. If her first impulse to buy comes 
through one of these methods, and it probably will, if the article 
is not advertised, the similarity of names will not hurt the 
manufacturer greatly. 

But two or three of the makers of these compounds are now 
beginning to advertise. Let a woman be convinced by the more 
or less careless reading of advertisements of Nodust, let us say, 
that she wants to try a package. She has no distinct idea of 
what the package looks like. How easy for the grocer who does 
not carry Nodust to sell her Nomordust instead, or Dustbain 
instead of Dustroy, Kildust instead of Death-to-Dust. 



50 ADVERTISING AS A BUSINESS FORCE 

The familiar slogan, " Buy by name," is reduced to a mockery 
in a case like this. If any one of those six manufacturers had 
used a little thought and foresight in selecting a name for his 
article, he would have had an inestimable advantage over his 
competitors when it came to selling through the written word. 

A short time ago a large corporation was about to put a new 
article on the market. The sales plan was ready. An exten- 
sive advertising campaign had been planned. 
TheVdue ^ number of the lines produced by the company 
tablished were sold under an inclusive trade name. In the case 

Name of this particular article one of the officers decided 

that variety in names is as spicy as in life. He 

selected a name totally unlike the trade name of the company, 

which was already widely and favorably known. The executive 

committee approved his selection. 

Fortunately the advertising manager of the corporation 
knew his business, and furthermore had backbone enough to 
object strenuously to a thing he knew was wrong. The adver- 
tising agent backed him up and finally the name adopted was 
discarded and the regular trade name used in its place. A brand 
was snatched from the burning. The sale of that article through 
its advertising had been greatly augmented by means of the 
good-will already enjoyed by its unadvertised brothers. 

So, Mr. Manufacturer, use foresight rather than hindsight 

Good in matters pertaining to your label or trade name. 
Names to Don't select a name such as Star, O. K., Twentieth 

Avoid Century, Standard, Ohio. There are 180 Standards 
of one kind and another on the market to-day. There are 44 
Twentieth Centurys, over 50 O. K's, 41 Ohios, almost 200 
Stars. The name Ohio is descriptive in a geographical sense. 
It cannot be protected. The other names have lost value on 
account of their commonness 

Beware of the association of ideas on the part of the public. 
Such names as Standard, Peerless, Perfect, Perfection, suggest 
alike the idea good or best. The identity of the name is apt to 
be lost in the idea it suggests. Get a name that is distinctive, 
short, easy to spell, easily remembered, and print it so that it 
can be read. Then drive home in your copy the idea that the 
article it represents is the best. 

What I have already said with regard to the appearance of an 
article applies largely to the package in which it is sold. 
This is especially true when the nature of the article makes a 



RELATION OF ADVERTISING 51 

container absolutely necessary, as is the case witli most 

articles of food, with liquids, powders, cold creams, etc. Here 

the package takes on the nature of the article itself, 

///. Ad' and it should not only be attractive in appearance, 

vcrtismg j-^^^ should lend itself readily to the purpose it is to 
Aspects of , . '' X- X- 

the serve when m use. 

Package A polishing cloth for metals designed to take the 

place of the familiar liquid and rag combination was 

on what appeared to be its deathbed. Although the ills which 

beset it were numerous, not the least among them was the form 

of its container. 

The cloth is moist and should have been sold in a package 
that would serve as a repository for it when it was not in use. 
Instead, the manufacturers packed it, tightly rolled, in a small 
cylindrical carton. When the cloth had been taken from the 
carton and wrinkled in use it could not easily be replaced. 
A special place in which to keep it had to be found. As a result, 
the fact of its moisture, an unpleasant feature at the best, was 
accentuated, and repeat orders from the consumer were not 
forthcoming. 

Every manufacturer of package-sold goods should accompany 

his package into the home of the consumer, study its 

Study the aclvantages and disadvantages as they show them- 

Product selves there. Then he is in a position to make 

Service intelligently the changes that suggest themselves as 

Conditions necessary. This step, however, shovdd be taken at 

the beginning of the sales campaign, not put off until a certain 

amount of good-will has been created for the package in its 

original form. 

*If the trade discounts on an article are too low, or if the 
price to the consumer is too high, the fact will be 
IV. The discovered at the beginning of a sales campaign usually 
Price in long before any advertising is indulged in. 
,■■ ^^^' When the trade is being allowed too large a profit. 
Relations however, it may take an advertising campaign to 
bring to light the evil that is resulting. 
An unreasonably high trade discount is, if not an invitation, 
at least a temptation to the dealer to cut prices. 

There is an article being sold through the hardware trade on 
which, up to a short time ago, a profit of 90 per cent, was 



Printers Ink, April 11, 1912, p. 67. 



52 ADVERTISING AS A BUSINESS FORCE 

allowed. The manufacturer sought to curry favor by allowing 
this profit. His competitors only give from 40 to 50 per cent, 
and the trade had always been well satisfied with the prices. 

The 90 per cent, man began to advertise. Trouble 
followed immediately. The price of his commodity was a 
feature that should have been, and was, given prominence in 
his advertising. This very prominence showed at once that his 
commodity had no stable price. It brought to a head a sore 
that had been festering for some time. 

The article was supposed to retail at one dollar. The trade 
had been selling it at from sixty-five cents to ninety-five cents. 
In few instances had the full price been asked. 

When the advertising created a demand for the article at a 
given price the inevitable happened. The consumer found that 
he could buy at less than he expected. Shopping for the lowest 
price followed. Confusion and dissatisfaction among the trade 
resulted. 

From the above example, and I know of at least one other 
similar case, it will be seen that too great liberality is as inju- 
rious in sales work as penuriousness. Also it takes the written 
word to show the fault clearly. 

If a manufacturer, while his business is in its infancy, 

V The ^^^^ ^^^y ^^^^ ahead and plan for bigger, better 

Advertis- days, he will save himself untold worries, bring untold 

ingSide of dollars into his pocket. This applies as truthfully to 

Distribu- \^q question of distribution and to distributing 

*^" methods as to any other department of business. 

The citation of two specific instances will be sufiicient to show 
the all-important relation between the distribution of a com- 
modity and the advertising of that commodity. 

Two years ago I listened to the tale of w^oe of a textile manu- 
facturer. His first advertising campaign, which had involved 
an expenditure of $15,000 in women's publications and trade 
papers during a period of eight months, had ended dis- 
astrously. Results were nil. The money had apparently 
been wasted. 

I looked at the copy that had been run. It was attractive, 
convincing. I examined the fist of mediums used. So far as 
class went it was all right. I asked the manufacturer about 
his distribution. It was nation wide. The number of towns 
in which his goods were sold? About a thousand. The number 
of dealers handling his line? About a thousand. 



RELATION OF ADVERTISING 53 

There was the solution. A national campaign to the con- 
sumer with a thousand dealers, scattered from the Atlantic 
to the Pacific, handling his goods! The waste was enormous. 
No wonder that the campaign had failed. 

He had about 25,000 possible customers among the retail 
trade. Fifteen thousand of them were located in the towns 
in which he had distribution. A woman who read his advertis- 
ing and was influenced thereby had, on a national basis, but 
one chance in twenty-five of finding his goods on sale in her 
store. Limiting the hazard to his cities alone, she had one 
chance in fifteen. 

This man had agreed to sell to only one dealer in a town. His 
customers were not limited, however, as to the selling of com- 
peting goods. He gave everything, received nothing. Under 
his plan his total market consisted of 1,200 retail dealers, there 
being that many towns in the United States in which his goods 
could be sold. 

Advertising of almost any kind was for him impossible. A 
magazine campaign was out of the question under his plan of 
distribution. A newspaper campaign, supposing that he spent 
only $100 per town, would total $100,000. He had so limited 
his sales that an expenditure of even half that amount would 
have been impossible. In fact, so far as advertising went there 
was only one thing he could do — get into the advertising 
columns of his customers. 

A few weeks ago there walked into my office a man who had 

made up his mind that he would advertise the article he made — 

an article of general household use selling through hard- 

Behveen ^^^^■> house furnishing, and department stores. He 

Advertis- was firmly convinced that advertising would pay him. 

ing Cost From what he told me I judged that it would — but 

and Dis- ^ot with his present distribution. He has three sales- 

Exvense ™^^ °^ ^^^ road. One covers the Pacific Coast — 

because when hired, he said that he was most familiar 

with the trade there. One works in New York City. The 

third is busy in New England — busy there, it seems, because 

he was familiar with that territory. 

I convinced the man who committed the above crime against 
good sense in selling that he cannot advertise. It would take 
between $30,000 and $40,000 a year to cover his territory 
adequately with newspapers. Under present conditions sales 
do not warrant such an expenditure. Magazines could not be 



54 ADVERTISING AS A BUSINESS FORCE 

used. His distribution was too scattered. So, this man, who 
wants to advertise and should advertise, has, through lack of 
sales knowledge, effectually closed the advertising door against 
himself. It must remain closed for some time to come. 

The moral of all this is plain : Concentrate your sales efforts. 
Select as a centre the most promising field for your product. 
Then work out from that centre. 

The advantages that accrue do not all relate to advertising. 
This method of conducting a sales campaign has many general 
features that make it advisable in most cases and that are too 
obvious to need mention. 

Advertising whets the edge of competition. With one excep- 
tion it is the most direct form of competition. The manufacturer 

yj who becomes an advertiser enters, in effect, into a 
Picking great debate. His opponents are his competitive ad- 
Out the vertisers. His audience and his judges are the people. 
Selling jjg ^^r[\\ -y^rin or lose primarily on the strength and 

'^^^ * clarity of his argument, not on the virtues of his 
proposition. To win decisively he must not only present con- 
clusions, but also the facts from which these conclusions are 
drawn. He must deliver a stronger, a more convincing argu- 
ment than his opponents. 

Few advertisers, particularly new ones, realize the value of 
the use of logic in their copy. Sweeping, unsupported state- 
ments are the rule ; careful, deductive reasoning the exception. 

This all leads inevitably to the question of individuality in 
copy, the necessity of giving the consumer some distinct, indi- 
vidual reason for believing that one article is better than another. 

In planning an advertising campaign for a manufacturer with 
whose proposition I was totally unfamiliar at the beginning, I 
came eventually to the consideration of copy. The general 
sales plan, the matter of his relations with his trade, the items 
of cost and profit, manufacturing methods, etc., had all been 
gone over. Everything was as it should be. 

My manufacturer did not have much to say about his copy. 
On my asking him what he considered his strongest selling points 
with the consumer he produced a collection of forty or fifty 
advertisments that had been run during the two previous years. 

"Here," he said, "this copy gives the whole story. You'll 
probably get more out of it than I could tell you.'' 

I read his copy from the beginning to end. I read the copy 
of his three chief competitors. When I got through I knew no 



RELATION OF ADVERTISING 55 

more than I did at the beginning. Every one of the hundred- 
odd advertisements I read told me the same thing. Each told 
what the article mentioned could be used for. (All four served 
the same purpose.) Each either directly claimed or implied 
that the article mentioned was the best to be had. Nowhere 
was there an original, distinctive selling point. 

But the manufacturer I was working with has such a sales 
point now. It is based on one small process of manufacture. 
He had entirely overlooked its importance. But, 
What Is a properly featured, it has doubled the efficiency of his 
Foint? advertising and carried him far ahead of his com- 
petitors. I will venture to state that there is no 
commodity on the market that has not some salient feature in 
connection with it that can be turned into capital as a sales 
point, an actual reason why the article is or does what the maker 
of it says it is or will do. 

Sometimes this sales point has to be created — ■ a slight change 
in manufacturing method, a change in shape. But a clue to it 
is always there. 

I should like to give other and more specific examples under 
this heading, but to do so would mean, frankly, the disclosure 
of so-called trade secrets. 

To prospective advertisers I can only say this: the man who 
has only come into contact with his jobbing or retail trade 
steps into an entirely new field when he begins to advertise 
to the consumer. The sales arguments he has been accustomed 
to become useless. He must create new ones to meet new con- 
ditions. In some particular the thing he makes is different 
from and possibly better than the thing his competitor makes. 
He should discover the particular. . . . 

These points made by Mr. Collins show some of the ways in 
which the sales possibihties of the goods, and the sales methods 
affect the advertising. On the other hand, the advertising often 
has a very distinct effect on the sales possibilities of the 
goods, and upon the sales methods as well. The relations 
between advertising and seUing are of the nature of a constant, 
mutual interaction. 

Hamilton Gibson, Manager of the Cereal Department of the 
Ralston Purina Mills, St. Louis, and formerly Advertising 



56 ADVERTISING AS A BUSINESS FORCE 

Manager of Sanitol, treats this phase of the subject con- 
cretely, as follows: 

DEVELOPING THE SALES POSSIBILITIES OF AN ARTICLE 

*The great modern force of advertising has changed mer- 
chandising conditions completely about, so that the merchant 
now says, "You create the demand and then I will stock your 
goods. For to-day so powerful is advertising, that it not only 
takes the goods off the dealers' shelves, but puts them on as 
well." Therefore, to-day salesmen follow advertising and are 
the result of it, securing the advantages of distribution through 
the demand that advertising has created. 

Goods sold to the dealer are only half sold. The complete 
circle is the sale to and use by the consumer. 

Do not let me lead you to infer that there is no further need 
of compact and strong selling organizations. They are more 
needed now than ever before. A sales manager and advertising 
manager are one and the same person — or should be. Both 
are arms of the same body, two component forces working 
toward the same end, sales. Advertising blazes the trail, 
creates the desire, fixes a state of receptivity in the mind that 
finally results in the purchase. The sales force, taking advan- 
tage of this, steps in, feeds that want and places the goods so 
as to be easy of access among the wholesalers and retailers. 

Every article has its peculiar sales organization, one which 
experience has developed as best fitted to distribute that par- 
ticular product. The wholesaler is the grand absorber 
Or miiza- ^^ thousands and tens of thousands of articles in his 
Hon and general line that the trade demand — the great central 
the Adver- storehouse for supplying an instant call. The jobber's 

Using force of salesmen have beaten tracks, and customers 
Campaign ^^^ gohcited regularly. The jobber redistributes and 
stocks heavily on specialties, which are fed out by his special 
staff of men. The shoe houses go direct to the merchant with 
their selling organization, if they are big enough; if not, to the 
jobber or broker. The broker has developed for himself a strong 
position. He is known, locally, and favorably in the territory 
he covers — sometimes a single town, sometimes a group of cities, 
or a limited territory. The manufacturer saves his selling 
expense in that territory by dealing with the broker; often sells 

*Printers Ink, March 23, 1911, p. 54. 



RELATION OF ADVERTISING 57 

his product direct to the broker, who redistributes to the trades, 
including tlie jobbers, through his own men. Many articles can 
be more economically sold through brokers than by maintain- 
ing a force of salesmen. 

I have been particularly interested in watching the progress 

and experiment that is being made in New York City during 

. the past two years. There is a gentleman who owns a 

Peculiar cleaning fluid — well-known to you if I should mention 

Case it. He believes so strongly in the theory that advertis- 

Which is ing makes its own demand and sells its own goods, both 



an 



„ . to the consumer and to the retailer and jobber — 
securing its own distribution and without the oper- 
ation of any sales force — that he is spending a big sum of money 
each year in publicity, using all kinds of mediums; yet does not 
operate a single salesman. All his business comes to him by 
mail, as a result of the consumer demand, and money that 
would be spent in salesmen is thrown entirely into advertising, 
and his little office force carries on a big business entirely through 
correspondence. It's rather an ideal way to operate if you can; 
but most businesses need salesmen, and the best that can be had. 
There are merchandising problems, however, where an expensive 
sales force can be eliminated, the products being of such a 
nature that the trade can be carried direct from the factory to 
the wholesaler and retailer. Many hardware products, especially 
paints and certain raw materials, are instances of this kind. 

The retail merchant then orders as needed — the result of the 
local demand from advertising. In that way the dealer stocks 
r , J no more than his local consumption warrants. He is 
vendence never out of the goods. He is constantly getting small 
of Adver- lots from the jobber The jobber stocks it, and the 
Using and business is carried through in the most economical 
Sales Or- j^anner. Advertising in these cases will then have 
n gj^^-j,gjy absorbed the function of selling. 

But the manufacturer's selling force, under most conditions, 
is coming to consist of highly specialized men covering large 
territories, seeing only the biggest trade, and keeping things 
running smoothly in their respective territories. And the 
salesman is becoming more and more a through-and-through 
advertising man. 

A big scouring-soap concern in New York City has developed 
their business on similar lines, so that to-day their goods, through 
years of constant publicity advertising, are sold in over 250,000 



58 ADVERTISING AS A BUSINESS FORCE 

grocery stores in the country. Their business is constantly 
growing, and the demand has gone into practically every nook 
and corner of the country. This concern operates a group of 
only fifteen salesmen, who do not pay their expenses through 
the orders they take, but are kept in the field to maintain the 
company's prestige, to keep in touch with the trade occasion- 
ally and as a means of directing local sales effort whenever 
required. 

A selling organization is to-day an advertising organization. 
Each follows the advantages provided by the other. 

DEVELOPING THE ADVERTISABILITY OF AN ARTICLE 

A suggestive discussion of how the advertisabihty as well as 
the salability of the goods advertised as affected by the adver- 
tismg is found in the following article by W. P. Werheim, 
Advertising Manager of Pratt & Lambert, of Buffalo, N. Y., 
makers of paints and varnishes: 

. . . . *I shall mention specific examples rather than 
endeavor to lay down any general principles, as every com- 
modity has its own peculiar advertising advantages. 

In the first place, the manufacturer must determine whether 

his product is necessary, desirable, or can be made so. Second, 

he must ask himself whether his product is new. 

What an different from, better than, or at least as good as, any 

Will Show similar product. Then, if he is convinced that his 

product will measure up to these two requirements, 

he may proceed farther. 

The manufacturer of an article about to be advertised must 
be prepared to make good on his advertising in other words, 
the article must be as good as his advertising. He owes this 
to the public and on this will depend his final success. 

Assuming that the article now to be advertised has true merit, 
the next step is to offer it to the public in attractive garb or 
dress. If it is a good household article or other small com- 
modity, he must look carefully to the package. The package 
should be of convenient size, attractively labeled and easy to 
open. As examples, there are the packages of the Uneeda 
Biscuit, Colgate's Toilet Preparations, and some competing 
preparations. 

* Printers' Ink, January, 5, 1911 p. 27. 



RELATION OF ADVERTISING 59 

If the article itself has no exceptionally prominent qualities 
or values, a scheme frequently can be evolved to make an 
advertising point of advantage. As an instance I cite the 
Colgate Tooth Cream. Many thousands of dollars are being 
spent in acquainting the public with the fact that this dentifrice 
"Lies flat on the brush like a ribbon." The opening of the tube 
is so constructed that the cream comes forth in this manner. 
Other dentifrices do not lie flat on the brush. Thus, the 
Colgate people have really given this article a quality or an 
advantage which the product itself did not possess. This 
demonstrates how an advertising asset can be created. In 
this instance, it is in reality service — service to the customer; 
he is enabled to use this article more conveniently and more 
economically. Many tremendously successful campaigns are 
based on just such simple points. 

In placing an article on the market, such a small matter may 
make or break the would-be advertiser. 

The advertisers of Towle's Log Cabin Syrup put up their 
syrup in miniature tin log cabins. They say in their advertise- 
ment: "It is put up in the log cabin can." These advertisers 
have thus linked very closely the style of package with the name 
of their product. 

In advertising one product of the concern with which I am 
connected — I refer to "61" Floor Varnish — we fastened upon 
one point which could be featured; that point was durability. 
Heretofore, in the advertisements of similar products, the point 
of durability was merely mentioned incidentally. We let the 
other fellow tell how beautiful floor finishes are in general and 
how easily they may be applied. On the other hand, we 
endeavor, in our advertisements, to drive home the durability 
of "61" Floor Varnish, through illustrations of our hammer 
and heel test, as well as in the copy. This advertising has been 
exceptionally successful, whereas a campaign on a similar 
product, exploited in the usual manner, was a flat failure. 

An advertiser may have an article which has a peculiar 
advertising asset in some territories and not in others. For 
instance, Huyler sells candies "Fresh Every Hour." This 
phrase is an advertising asset, but it would mean absolutely 
nothing and would sound absurd to use it in a magazine or in 
the many towns where Huyler sells but has no stores. 

Many manufacturers have established service departments — 
that is, they have established departments to serve customers. 



60 ADVERTISING AS A BUSINESS FORCE 

The people in such departments devote their entire time and 

efforts to giving the customer technical information as to how 

a product may be used to best advantage, that its 

Advertis- f^y worth may be developed by the customer himself. 
^Resultm These departments are featured in the advertising. 

Finding Thus a most valuable advertising asset is created. 

or De- In these days of modern advertising, we may almost 

veloping gg^ j|- down as a general rule that the ordinary known 
Points qualities of a product are not sufficient to make it 
an advertising success. The qualities must be en- 
larged upon, developed or added to in some unique manner 
to secure the greatest eflBciency of the advertising. I do not 
mean by this that it pays to do dishonest advertising, but that 
the advertiser should take advantage of every legitimate means 
to emphasize the qualities of his product, and thus actually 
add value to it. 

In short, the state of mind of the purchasing public, or the 
individuals composing it, determines the "advertisability" of 
a product. It is the key to the final solution of the sales 
problem. Occasionally a desirable state of mind may fortu- 
nately already exist and the only requirement is the mere an- 
nouncement of the qualities of an article, but usually this 
desirable state of mind must be created by effective illustrations 
and forcible copy. 

You have got to win your public or the individuals composing 
it. This done, you have won your market. 

EFFECTS OF ADVERTISING ON UNADVERTISED GOODS 

Thus advertising affects the selling properties of the goods 
advertised. It also frequently affects lines not covered by the 
advertising — perhaps quite remote from it. A case in point 
is brought out in the following discussion: 

Vacuum *"The $250,000 or $300,000 a year which is being 

Cleaner spgjj^ jn advertising vacuum cleaners has also helped 

ing^Helps "^ ^^ ^^^^ carpet sweepers, and I imagine it has made 

the Carpet a market for brooms, too," says G. Q. Porter, the 

Sweeper secretary and executive officer of the National Carpet 

Trade Sweeper Company, of Newark, N. J. "We cannot 

tell just how much it has helped us, but we know that we 

*Printers' Ink, November, 16, 1911, p. 52. 



RELATION OF ADVERTISING 61 

have gained about 50 per cent, in business over last year, and 
must attribute some of the increase to something besides our 
own advertising and sales effort. 

"The peculiar value of the vacuum cleaner advertising," 
continues Mr. Porter, "is that it has educated the people to 
a higher standard of household cleanliness in a way that the less 
striking and picturesque methods could not do. It has probably 
educated the people to higher ideals of household cleanliness 
faster than it has been able to educate them to vacuum cleaners, 
and the sweeper and broom lines have profited by the increased 
interest, at the expense, in a way, of the vacuum cleaner people, 
though the outlay will all come back to the latter in the long run. 

"Undoubtedly a large number of housekeepers have grad- 
uated from brooms to carpet sweepers, and in time a large 
number of carpet sweepers will be relieved of the heaviest 
responsibility in housecleaning by the addition of vacuum 
cleaners, but it will be a long, long time before the vacuum 
cleaner is so perfected as to absolutely displace either sweeper 
or broom. It would be needless and bothersome, for instance, 
to unship the cleaner every time one wished to pick up threads 
or crumbs on the floor if the sweeper or broom would more easily 
dispose of them. Some households can afford only a broom, 
but those that have sweepers have brooms also, and those which 
employ cleaners have the others, too." 

There is another aspect of which Mr. Porter did not speak. 

The National Company is comparatively a young company. It 

is not more than six or seven years old. There are 

hHel' *^^^^^ carpet sweepers in the field and until a short 
EachOtker time ago one almost monopolized the market. The 
advertising which that one has done has, of course, had 
large share in softening the market for sweepers and to a lesser 
degree for brooms. So the younger concern has profited not 
only from the advertising of the suction sweeper but also from 
the more direct demand created by the older concern. . . . 

Inquiry among the broom manufacturing houses shows that 
the industry has probably not been injured by the vacuum 

jT^g cleaner and carpet sweeper advertising. It has grown 

Broom as the population has grown. If it were advertised it 

Business is possible that it also would be able to cash in more 

Also heavily yet on the publicity of the other methods. 

rives rpj^g experience of these lines of business suggests that 

it might be profitable to give more thought to the subject of 



62 ADVERTISING AS A BUSINESS FORCE 

industry advertising than is generally given. The biggest men 
in the field appreciate that what is, rather loosely, called com- 
petitive advertising, involves a great deal of waste. Advertising 
with your eye on your competitor distracts attention from the 
educational function of your ad. In scheming up wordings, 
pictures and effects to offset his advertisements, you are in 
danger of missing the customer's eye. Two competitors who 
are doing this might as well be two clerks quarreling behind 
a counter while possible customers hesitate and pass on. 

Few fields ever do reach their limit — for those who attend 
strictly to business. Beyond the developed demand there is 
almost always an immense undeveloped demand, and it is 
generally, we could almost say always, cheaper for rivals to 
combine in developing this latent demand than to struggle 
murderously to grab off the lion's share of the limited trade. 

THE EFFECT OF ADVERTISING ON DEMAND AND DISTRIBUTION 

Commercially, the prime effect aimed at in all advertising 
is some form of influence upon demand. To create, to control, 
to stimulate demand — for one or all of these advertising is 
done. Wm. H. IngersoU, who is advertising director of the 
concern making the widely known IngersoU watches, has this 
to say about the interrelation between advertising, the demand, 
and the distribution system: 

*Neither distribution nor demand can precede the other 
without loss, without wastefulness and therefore without loss 
of efficiency. If we are going to wait for distribution until we 
have created a demand, we will wait forever, or nearly forever. 
On the other hand, if we are going to create a demand without 
distribution — rather, if we are going to try to create a demand 
without distribution, without advertising — there again we are 
going to delay the time that we reach the success to which we 
are entitled. In other words, the most economical, the most 
efficient way, in my opinion, of handling this subject of distri- 
bution and demand is to go ahead in a moderate way and 
advertise, and take the sales methods that are at hand and keep 
the demand going by getting all the distribution you can. 

*Printers Ink, March 9, 1911, p. 71 



RELATION OF ADVERTISING 63 

I have had a very interesting experience in the convention of 
our own salesmen. During this convention the question of 
what is demand came up. We found it possible to 
Demand^ clarify in the minds of our salesmen to a very great ex- 
tent what they are to say on this question of demand. 
Some of them had thought it was the idea to threaten the dealer 
with bankruptcy if he didn't have our goods, because of the 
demand that was being created by our advertising. Some of 
them had become so discouraged that they never talked of 
demand, and they plead with the dealers to stock the goods on 
some personal basis to save their jobs, and between the two we 
found that the real solution is to explain to the dealer what 
demand is, and we tell them it is this : 

Advertising and all business is a matter of the mind; all that 
we claim, all that we ask our salesmen to say to the dealers of 
this country is that our advertising itself is to help 
Demand them create the possibility for sales, to teach the retailer 
tribution ^^^^ ^^ ^^^ placing in the minds of the people, his cus- 
tomers, people that are round about him, certain infor- 
mation that predisposes them favorably toward the thing which 
we are advertising. Now, in order for them to avail themselves of 
that something which we have placed in the minds of the people, 
it is necessary for them to have the goods, advisable for their 
own sakes to sell those goods, to recommend them, to say what 
they are, and to realize on this favorable condition that we 
have created. Not to teach them but to tell them that they 
must have those things. I believe that these salesmen were 
greatly strengthened by getting that into their minds. Of 
course, we went into it with them in greater detail. It helped 
them to understand on their own account what advertising is, 
and I contribute that thought here for the sake of the utility 
it might have for some of the men who are having like 
problems. 

This is a very human proposition; all of business is a human 
proposition. The dealer can very materially influence the sale 
of any line of goods he carries. If he wants to sell more, he can 
help, or if he wants to sell less, he can help. What are the means 
by which he can be induced in the matter of profit, and what 
are those things which are more or less fixed in business, the 
adjuncts, the supplementary methods that are available to the 
sales organization for giving a little more speed to the sale of 
goods in dealers' stores .f* One desideratum is to acquaint the 



64 ADVERTISING AS A BUSINESS FORCE 

dealer with the merits of the goods, and with the kind of talk 
to be given to the trade in support of your advertising. 

I have sometimes noted with surprise the effect with which 

,. ,. retailers accept and utilize information along that 

Uv"^ Goods ^^^^- If yo^ ^^^ S^^^ them selling talk on your goods, 

and if you will possess the clerks of those dealers with the 

Demand ideas and their effective expression that they can use 

ma the -^^ selling the goods to the trade, you are doing a good 

work and a supplementary work to your advertising 

and distribution. 

WEAK LINKS IN THE CAMPAIGNS 

These discussions of the relations between advertising effort 
and the distribution system make it clear that while there are 
many things to watch in advertising as a business-creating 
force, none is more important than that the demand once 
created by the advertising be able to connect easily with the 
goods. 

x\n article on "Weak Links in Big Campaigns," by Chal- 
mers Lowell Pancoast, presents this point quite vividly. Mr. 
Pancoast says: 

*A few weeks ago I saw a "first-timer" advertisement in a 
weekly magazine. The article advertised was something I 
wished to purchase very much. In fact, I was converted into 
an immediate purchaser from the first reading. 

The advertisement was attractively illustrated, presented 
convincing arguments, mentioned a six months' guarantee, 
named colors, sizes and prices. Not one of the important sell- 
ing points was omitted. When I had finished reading I had 
fully made up my mind to purchase one of these articles. 

At the close of the advertisement appeared that old familiar 
phrase, "Ask your dealer." Now in Chicago, as in other large 
cities, with such indefinite directions the prospective purchaser 
simply must take chances. 

I went to four stores and could not find the article at any 
of them. At each place I was offered "something just as 
good." . . . 

*Advertising and Selling, May, 1912, p. 144. 



RELATION OF ADVERTISING 65 

The chances are that five out of ten people would have 
been influenced by the salesmen's talk and immediately for- 
gotten the advertised article. But I had firmly 

Four decided I wanted this particular article, which had 
Chances j^ggj^ described so convincingly. When I could not 

tuiion fiiid it at the stores, I wrote to the manufacturer, and 

in a few days received a form letter which did not give 

me any further information. I was just about to write to the 

advertiser and jog him up for a second time when a letter came 

giving the names of two dealers in Chicago. 

At one of the stores mentioned I had already called, but I 
went again and found the article was being sold without any 
ticket or mark to show it was the article advertised in the 
magazine under a trade-marked name. 

After I insisted on being shown that it really was the 
article advertised the clerk reluctantly pulled out the original 
box from beneath the counter and there I saw the 
'^^ir^the^ trade-mark name on the box. 

Trade- In the advertisement the phrase "Guaranteed 

mark and for Six Months" had been played up strongly. The 
Guarantee word "guarantee" had been mentioned three times. 

Lam- rpj^^ guarantee tickets had been removed from the 
article, and when I asked for the guarantee ticket the 
clerk said it was not necessary — that if it did not wear 
to bring it back. But I insisted on the guarantee ticket and 
finally it was dug out of the bottom of the box, where it had 
been thrown when taken from the cap and replaced by one 
of the store's price tickets. 

I do not believe there is one person in twenty who would have 
gone to the trouble I did to purchase this article. 

My experience is conclusive proof that this apparently 
excellently constructed national campaign has several costly 
"Weak Links." 

In the first place, if the advertiser had used a couple more 
inches of space and condensed the ending of the ad, he could 
have given the names of the dealers in all the larger cities where 
this article might be found. 

In order to get results from the greatest number of large city 
prospects it is necessary to give the pame of the dealer. In this 
advertisement very small type would have been ample to direct 
the customer. The lack of this information undoubtedly lost 
the advertiser a large number of immediate sales. 



66 ADVERTISING AS A BUSINESS FORCE 

In this case, where the trade-marked article was something 
new, it was a serious weak spot in the campaign. This same 
"Weak Link" may be found in plenty of other advertised 
products. Sales are lost because the advertiser does not bring 
the consumer in touch with the dealer. 

Thousands of dollars invested in good, result-getting adver- 
tising are wasted because of this one "Weak Link." 

Another weak spot in the campaign just mentioned was the 
fact that the dealer was permitted to remove the guarantee tag, 
and place the articles on sale with no mark of any kind to 
identify them with the trade-mark on which thousands of dollars 
was being spent. 

Any manufacturing advertiser who used the larger weeklies 
and monthlies certainly should make his campaign to dealers as 
effective. But I saw this same product displayed in a dealer's 
window without anything to identify it as the trade-marked, 
advertised product. This is even a more serious weakness in 
the campaign which is costing the advertiser many profitable 
sales in addition to the money invested in advertising space. 

In planning the campaign every link in the chain which ex- 
tends along the trade channel should be tested thoroughly before 
the chain is suspended to bear the weight of public patronage. 

Here was from all appearances a very well-exefcuted national 
campaign, yet my personal experience in reading the advertise- 
ment and attempting to buy the article in Chicago proves it has 
many "Weak Links" which are costly leaks. . . . 

REVIEW QUESTIONS — CHAPTER HI 

1. What seven things does Mr. Collins mention as being 
necessary for the advertiser to consider in trying to sell goods? 

2. Why does he think these are more important in trying to in- 
terest customers through advertising than through personal sale? 

3. Do you consider the case of the cleaning compound 
mentioned by Mr. Gibson an exception to the rule he states 
or is it only a variation? 

4. Referring to the opinions of Mr. Porter, do you agree 
with him that vacuum cleaner advertising has had any effect 
on trade in carpet sweepers and brooms? Is there any way to 
prove whether it has or not? 



RELATION OF ADVERTISING 67 

PROBLEM QUESTIONS — CHAPTER III 

1. A weak link in many national clothing campaigns has 
often been pointed out in the failure to direct the prospective 
customer to the nearest local representative. Can you suggest 
any practical remedy for this? What would you think of the 
insertion of the manufacturer's name or card in local directories 
and telephone books of some of the large cities, giving the 
street address or 'phone number of the representative as a means 
to this end? 

2. Could you suggest ways to better the methods used by 
the cap manufacturer (pp. 63-65) to co-ordinate his national 
and local advertising? 

3. Give concrete examples of how an article becomes more 
salable as it is wxll advertised. Is this always the case? 

4. What do you think of the suggestion that a new type of 
"industry advertising" might be employed to offset pioneering 
losses? Is the idea feasible? 



CHAPTER IV 

THE PROBLEMS OF MEDIUM SELECTION 

WE HAVE examined schemes of analysis, have looked 
into the advertising aspects of goods, of market, and 
of distribution methods and have seen the need of 
deciding what effect is to be striven for. Now we come to 
the question of what mediums will produce the desired effect 
^, „ , with the greatest certainty, with the least waste, and 

Ihe bales ^ i i i 

Factors in the least expense. Here we must depend partly on 

Medium our advisers in the field of advertising technique. 
Selection . , , i • i 

And yet we cannot turn the case over to them entirely. 

Important as are the elements of technique as tools, they are 

after all only the means to the end. The real end — the effect 

on demand — is largely determined by the character of the 

selling problem. If, for instance, we choose one market, by 

class, by geographic location, by income, by any one or any 

combination of measurement standards, we have already gone 

one step toward medium selection — and that a long step. 

Moreover, one does not need to be a prophet to see a very 
marked advance among mediums toward a policy of frankness 
and honesty in their statements concerning the patrons whom 
they reach, and concerning the results which may reasonably 
be expected to follow from their intelligent use. And this 
increased frankness makes it easier to select mediums to fit a 
plan worked out on analysis. 

Medium selection is a business by itself, calling for special 
training and much detailed knowledge. In most cases it will 
be found wise for the ordinary advertiser to seek and follow the 
advice of a trained and conscientious " medium selector " of 

68 



PROBLEMS OF MEDIUM SELECTION 69 

some kind. And yet there are some features of the problems 
of selecting mediums for the attainment of desired advertising 
ends which can and should be familiar to every advertiser. An 
editorial in Printers' Ink for May 4, 1911, p. 78, gives the fol- 
lowing estimate of advertising outlay in the United States 
through some of the chief mediums in general use 

Newspaper advertising (retail and general) $250,000,000 

Direct mail advertising (circulars, form letters, etc.) .... 100,000,000 

Magazine advertising 60,000,000 

Farm and mail order 75,000,000 

Novelty 30,000,000 

Billposting 30,X)00,000 

Outdoor — electric signs, etc 25,000,000 

Demonstration and sampling 18,000,000 

Street car advertising 10,000,000 

House, organs, etc 7,000,000 

Distributing 6,000,000 

Theatre programmes, curtain and miscellaneous 5,000,000 

$610,000,000 

Each of these main forms of advertising has its ardent ad- 
vocates. And the ardor with which they advocate their pet 
plans adds to the advertiser's difficulty of choice. Fortmiately, 
nearly every one of these methods is being reduced to a sound 
business basis. Greater care is being exercised to keep up the 
"tone" of the advertising carried, and greater frankness and 
honesty are being employed in telling the advertiser what service 
he is getting for his money. The advertiser's ability to gauge 
his mediums to his needs is still far from a basis of mathematical 
certainty. But as the mediums are more completely stand- 
ardized the advertiser is in an increasingly better position to 
base his selection of mediums on the results of his analyses. 
Newspaper advertising, making up nearly one half of this 
Recent estimated total, is the oldest, and probably the least 
Changes skilfully employed, of the more important mediums. 
'paper Ad- A large part of the trouble with newspaper adver- 
vertising tising is attributable to the careless methods of the 
publishers in accepting almost any advertising copy which 
would not actually exclude the paper from the mails. As a 



70 ADVERTISING AS A BUSINESS FORCE 

result many general advertisers have refused to use daily 
papers for display advertising. 

This disregard of standards of respectability, together with de- 
liberate misrepresentation of circulation figures, has prevented 
the newspapers from getting their full share of the advertising 
growth of the past decade — large as their share has been. 

A concerted movement has been made during the past few 
years to improve the quality of the advertising carried in daily 
papers, in order to make this form of publicity more attractive 
to the higher types of national advertisers. Early in 1910 
Printers' Ink wrote a letter to 250 newspaper publishers in the 
United States asking them what measures they took to prevent 
the appearance of fraudulent or improper advertising. 

The replies to some of these letters were published {Printers' 
Ink, March 16, 1910, p. 3) and indicated a very widespread 
awakening on the part of the newspapers to a sense of their re- 
sponsibility for the honesty of their advertising columns. Of the 
papers approached thirty -five refused to accept private disease 
advertisements under any circumstances, and ten others accepted 
such copy with privilege of revision. Patent medicines, guess- 
ing contests, intoxicating liquors, bucket shops, and reward 
certificates are other forms of advertising tabooed by an in- 
creasing number of papers. On the whole, the moral tone of 
daily paper advertising columns is being raised, and this medium, 
once cleaned up, bids fair to regain, to a degree, the preemi- 
nence it once enjoyed. And, furthermore, the sentiment is 
growing in favor of full and honest circulation statements by 
newspapers. As this practice becomes more common it will be 
increasingly easy for the advertiser to select his mediums with 
regard to their ability to produce the ends he has chosen to 
strive for. And newspaper advertising will come into its own. 
Already it is possible for an advertiser to take sworn circulation 
figures and with them cover a good many of the best markets in 
the country. And at the same time he can know in advance 
quite definitely what his outlay for space is to be. 



PROBLEMS OF MEDIUM SELECTION 71 

The figures covering magazine advertising in the table will 

be considered by many to be surprisingly small compared 

with the figures above it. But this is one of the 

iT?he most easy to estimate of all the figures, and probably 
Magazine jg not far from the true amount. The really surpris- 
ing thing about this figure is that it is largely the re- 
sult of about twenty years' growth. This form of advertising, 
after a brilliant career, is just now passing through what 
may be termed a period of readjustment. The indications are 
that it will come out of the period of remaking, on a sounder 
basis than it has ever been on before. 

Truman A. Deweese, director of publicity of the Shredded 
Wheat Company, in an address before the Sphinx Club in 
New York {Printers' Ink, March 23, 1910, p. 104), outlines the 
advantages of magazine advertising as compared with various 
other forms, and takes the ground that this type of medium 
"is all there is to national advertising." He contends that 
magazine advertising gets prestige on account of the exclusive 
and high-grade type of advertiser who is in a position to use it, 
from the length of life of the medium, from the dignity of its 
appeal, and from the uniformity of rates and the low cost of 
circulation per capita. 

The real importance of this medium in the advertising field — 
particularly in connection with national advertising — is not easily 
measured in figures, but some idea of it may be obtained from 
a few statistics showing the number of lines of advertising 
carried by 68 leading publications in 1911. These did not 
include any trade papers, and the list covers only publications 
with large general cirfculation. {Printers' Ink, January 18, 1912, 
pp. 92-93). The figures show that 26 general publications 
carried 4,533,000 lines in 1911, while 16 "class" papers (such 
as Motor, System, Outing, Country Life in America, etc.), carried 
nearly 3,980,000 lines, and 13 women's magazines carried nearly 
3,290,000 lines, and 13 weeklies carried 5,385,000 fines — a total 
of nearly 17,000,000 lines for the 68 publications. 



72 ADVERTISING AS A BUSINESS FORCE 

The characteristic thing about magazine advertising as 
a whole is the growing tendency to set charges for advertising 
space at a figure commensurate with the size and character 
of the circulation. 

Out-of-door advertising also has been standardized to a large 
degree. Practically all of the 3,000 or more local bill-posting 
New companies in the country belong to the National 
Methods Poster Advertisers' Association. Through this organ- 
door Ad- ization is handled that portion of the business of these 
vertising companies which is not purely local in character. 
This is about 30 per cent, of their total business, the 70 per 
cent, being such work as theatre posting, which is handled 
by the local concern without intervention by the Association. 

*The National Association does not fix the rates charged bj^ 
its members. It insists, however, that they shall not exceed the 
maximum, which is 20 cents per sheet per month, nor fall below 
the minimum, 9 cents per sheet per month. 

All boards are of standard size and construction, and the 
Association maintains detailed systems of inspection, has 
organized solicitors, and operates a system of receiving, execut- 
ing and checking orders on a nation-wide scale. The details 
of this system are told in the article referred to earlier in this 
paragraph. The most important point is the fact that this 
branch of advertising has within a few years been reduced to 
a stable and reliable basis, whereas it formerly was in a bad 
state of disorganization. The Association is now in process of 
justifying itself before the Sherman Law. 

For many lines of goods, cards in street railway cars have 

o, , grown very popular within the past ten years. A list 

Railway of grocery producers who were using car cards for 

Advertis- ^i^j^spread campaigns in 1910 includes the following : 

♦National Biscuit Co., Joseph Campbell Co., Walter M. 
Lowney Co., National Starch Co., Van Camp Packing Co., 

*Printers' Ink, May 23, 1912, p. 3. 



PROBLEMS OF MEDIUM SELECTION 73 

American Sugar Refining Co., Quaker Oats Co., National 
Food Co., Corn Products Co., Burnham & Morrill, Day- 
ton Spice Mills, Ghirardelli Co., Foulds Milling Co., Duff's 
Molasses, Gorton-Pew Fisheries, Sapolio, Ivory Soap, The N. 
K. Fairbank Co., Shinola Co., Nugget Polish Co., Globe Soap 
Co., Luntz Bros., Leet Bros., Chas. B. Knox Co., Carno Mills, 
Merrell-Soule Co., F. H. Leggett & Co., Woolson Spice Co., 
Armstrong Packing Co., Kinkasi Provision Co., Southern 
Cotton Oil Co., Pillsbury- Washburn Co., Southern Mfg. Co., 
Towle Syrup Co., Joseph Burnett Co., Beech Nut Packing Co., 
Holbrook's Sauce, Swift & Co., Cermon & Co., Postum Cereal 
Co. 

This list might be materially extended by including concerns 
advertising locally, or within a short radius. And similar lists 
might be prepared covering drug specialties and even wearing 
apparel. 

This medium, while still comparatively new, is taking its 
place among the most effective mediums for widespread 
campaigns, and the cards have been standardized and 
rates reduced to a basis having definite relation to service. 
Most of the car advertising in the United States, Canada and 
Mexico is under the control of the Street Railway Advertising 
Company. 

And so we might go through the entire list of principal 

rpj types of advertising medium and find the same evo- 

Relation lution taking place. Each is settling down to some- 

of Adver ^i^[^„ \[]^q a tangible method of relating cost to 

hsmg • 1 1 

Charges to service rendered. 

K^^7^^^ But the problem of medium selection is not merely 
a question of pickmg out different types of medium 
calculated to produce a pre-determined effect on a chosen lot of 
consumers; it involves also very intricate difficulties in corre- 
lating different types of advertising so that the results 
from each will supplement the other to the greatest possible 
extent. 



*Printers' Ink, February 2, 1912, p. 54. 



74 ADVERTISING AS A BUSINESS FORCE 

Obviously the advertising medium field di\'ides itself into 
two great groups, national or general, and local or direct. The 
first group represents the field of activity of the producer or 
general distributor and the latter belongs primarily to the 
retailer. The fields have been described as being designed 
respectively to put goods on the retailers' shelves and to take 
them off of those same shelves. And much has been written 
about the need of cooperation between these two fields of 
appeal to the consumer. 

By some it is contended that the advertising campaign of 
the producer ought to embrace the appeal in both fields, since 
they are merely parts of the same continuous distribution 
process. By others it is held that the processes are distinct 
and that they can best be performed separately by the general 
and the retail distributors respectively. 

AN EXPERIENCE IN TRYING TO CORRELATE NATIONAL AND 
LOCAL MEDIUMS 

An interesting case in point is the record of results secured 
by a concern manufacturing caps, which undertook 
Atemft to to do local advertising for a selected list of 163 of 
Correlate Jts retail dealers, and found the results unsatisfactory, 
^tnd "^ {Advertising and Selling, February, 1912, p. 40 ; March, 
Local Ad- 1912, p. 88.) 

vertismg ^pj^.^ concern made arrangements with 163 retail 
houses to do local advertising for them, and this hst of houses 
to be helped included a wide variety of types — city houses 
with big trade, small town and country dealers; some were 
extensive and some meagre advertisers on their own account. 
This local paper advertising was undertaken in addition to 
various other dealer helps, such as style books, display cards, etc. 
Three forms of agreement were worked out. In one the 
Results manufacturer paid for all the local space, under 
Secured specified conditions; in the second he paid for one 
half of it, and in the third he paid for the cut space only. The 



PROBLEMS OF MEDIUM SELECTION 75 

first was adopted by 72 houses in two seasons, at tlie end of 
which the business done with these houses fell off from $77,000 to 
$48,500 —a net loss of $28,500 including 23 houses lost outright, 
and 33 reducing their orders. The 23 houses adopting the 
second plan reduced their business from $31,000 to $22,100 — 
a net loss of $8,900, 8 having dropped out altogether and 7 
having reduced their business. The third plan fared a little 
better, being adopted by 68 houses, of which 11 were lost, and 
22 reduced their purchases, the sales to the houses using this 
plan declining from $47,100 to $43,000 — a loss of $4,100. 
(These and other data are given in Advertising and Selling, Feb- 
ruary, 1912, pp. 43-44.) 

Commenting on these figures the advertising manager of the 
concern says : 

*Now, our 163 customers, as per these tables, purchased 

a total of $155,571 for the seasons of 1910 and spring 

What the 1911. Those of the number who "repeated" and 

Advertis- stayed with us made purchases for the seasons of 

Manager spring 1911 and fall 1911 totaling about $113,651, 

Found the decrease being $41,920, or 26 per cent, instead of 
15 per cent. 

Selecting further unpleasant facts from the tables, we find 
that among the customers who "repeated" and stayed with us, 
there was a greater decrease in business than we could reason- 
ably' expect, when we compare their purchases for the two 
different seasons and make an allowance of a varying average of 
10 to 25 per cent, to cover the sales of overcoats, which, of 
course, are not purchased as heavily in the spring as in the fall, 
and vice versa. 

Thus, we might continue our investigation of the different 
kinds of losses these tables reveal. But "enough is plenty," 
particularly when we aren't pleased with it. Besides, what if 
we were compelled to figure the total gains or losses of our 
entire business from the evidence contained in these tables.'* 
To do so would surely indicate that if we had been losing 
business in general at the same rate during the same period, 
we'd have to close the doors and quit business here pretty soon. 

But we won't. We're going to stick right in the game. 

*Advertising and Selling, March 1912, pp. 88 et seq. 



76 ADVERTISING AS A BUSINESS FORCE 

We've been improving our product and service right along. 
And our direct-to-dealer campaigns for new business have been 
decidedly successful. While we were doing this localized news- 
paper advertising our total gains in new accounts were 50 per 
cent, in excess of our total numbeT of lost customers. The only 
important feature of this is that this gain was not the result of 
our localized newspaper advertising. Had it been these tables 
would never have been prepared. 

These returns having been received, the advertising manager 
set about trying to draw from his experience conclusions which 
would make the experience useful in future campaigns. 

In the first place, he was forced to conclude that he, at a 
distance from the local market, could not gauge satisfactorily 
the quantity of local advertising which would be most useful 
in a large number of localities. In the second place, he came to 
believe that the quality of the advertising done locally, at long 
range, was poor. The copy was necessarily of a general type — 
or "kettle" advertising — dozens of places with all kinds of 
varying conditions being served with copy from the same "pot," 
and localized merely by "sold exclusively by" and the dealer's 
name at the bottom of the advertisement. 

Summing up the results of this campaign this advertising 
manager says: 

In view of the above study of these tables and our discussion 
of the facts they disclose we can come to but one conclusion 
regarding localized newspaper advertising : That it is 
The Ad- expensive and unfortunate philanthropy, not suc- 
vcrhstng^ cessful selling assistance. Let the manufacturer man- 
Condu-^ 'lifdciure and let the retailer retail. The manufacturer 
sions who attempts localized newspaper advertising cannot 
control trade conditions, cannot control the mer- 
chandising methods of his customers, cannot prevent losses in 
business by means of his retail advertising, cannot publish in 
the retail fields anything but stereotyped, unvarying, kettle 
co])y, and not enough of that at a reasonable expense to get 
desired results. 

Why should the manufacturer break Into the retailer's 



PROBLEMS OF MEDIUM SELECTION 77 

legitimate field, anyway? Just as sure as he does he begins to 
promote commercial indolence, and to rob the retailer of his 
initiative, his business independence and energy, his desire to 
beat competition. Just as sure as the manufacturer attempts 
to take over any part of the retailer's legitimate duty and 
privileges he just as surely causes the retailer to lose his grip on 
his own business. 

Furthermore, your good live retailer doesn't want any of 
your localized newspaper advertising. He wants his own. 
He has a local reputation of his own and prefers to trade on it 
instead of yours, whether he actually boosts your product or not. 
Your copy that merely gives him a space for his name at the 
bottom of the ad is not localized advertising and he knows it, 
and he knows that his trade knows it too, and it is this trade 
he has to depend on for his life or death in business. 

The retailer is a whole lot closer to his trade than the manu- 
facturer is. He is a personal friend of two thirds of the people 
who come into his store for merchandise. Why shouldn't he 
do his own talking to them? Why let you do it? Is it any* 
wonder that he is indifferent to the manufacturer's effort to 
usurp by mechanical methods both his advertising functions 
and rights? Can you blame him for even actively objecting to 
having his advertising handled by a man who may be a thou- 
sand miles away from the firing line? And should the manu- 
facturer attempt to make kettle copy (even though it may be of 
Krupp-gun power intrinsically) produce business for a hundred 
different retailers in a hundred different places? 

Such advertising is misdirected effort and will weaken and 
not strengthen the position of both the manufacturer and 
retailer. You can help, you can enthuse the dealer, you can 
incite him to action, but don't do his advertising for him. 

ADVERTISING ABILITY AND THE VALUE OF MEDIUMS 

Whether or not one agrees that this single experience justifies 
these rather sweeping conclusions, he will find in it a specific 
case of great interest. Perhaps the failure was due to poor 
planning or poor execution. In any case, the results, beyond 
a doubt, did not justify the time and money spent in getting 
them. Possibly the fault was individual, although this hardly 
accounts for the uniformity of the failures. 



78 ADVERTISING AS A BUSINESS FORCE 

The advertiser's ability to make profitable use of a medium 
may have little relation to the instrinsic value of the medium. 
But, obviously, this ability is one of the important factors to be 
considered in making the choice of medium to be employed. 
James H. Collins discusses this in an article on "Advertising 
Mediums of To-morrow." In the course of this article he says: 

*During the past five years thousands of manufacturers who 
never advertised before have tested this new resource of selling. 
Some have gone into national mediums only to discover 
J) jg that the best thing for them was intensive develop- 
on the ment of territory around home, where their distri- 
Skill with bution is strong. Others have begun locally, and 
Which found that it was possible to expand the campaign to 
MediMms national proportions. Manufacturers in trade journals 
have broken new ground by entering general mediums, 
and those in general mediums have strengthened their trade 
•journal work. General mediums begin to take on a strong 
flavor of dealer argument in many cases, and at the same 
time purely general copy addressed to the consumer is 
found in trade publications. National mediums have been used 
for local purposes. Local mediums have been used to secure 
a national effect, and local advertising backed up by national 
methods of follow-up. 

In other words, as advertisers learn how to advertise, the fine 
differences between mediums tend to disappear. Most of them 
are arbitrary, anyway — distinctions made for space-selling 
purposes. 

The time is at hand when the advertiser, asked to name the 
best medium, will no longer knit his brow in thought. He will 
laugh. He knows that all good mediums are neces- 
Naming sary, and that the best is an ideal combination of 
Medium them all, each in its place, and every one pulling to a 
common end. 
This being so, the men who publish the mediums and sell the 
advertising space will unquestionably be found working to- 
gether more closely to-morrow than they are to-day. It is not 
to be expected that competition will cease. That is not to be 
desired. But on certain fundamentals they are bound to work 
together. It is in line with all business development nowadays. 

^Printers Ink, April i, 1912, p. 24. 



PROBLEMS OF MEDIUM SELECTION 70 

111 our first chapter we discussed the importance of com- 
mercial analysis as a part of advertising plans for goods to be 
sold finally at retail. In the second, we examined some of the 
problems growing out of the disorganization of the distribution 
system leading to the retailer. In the two succeeding chap- 
ters we tried to show how the advertiser who starts with an 
appreciation of the selling problem suggested m these two 
former discussions may first select the end for which he is to 
strive, and then may set about choosing means for the attain- 
ment of that end. 

In all this, while we have adhered to concrete illustrations as 
closely as possible, we have been obliged, for the sake of clarity, 
to make our statement of problems much simpler than are the 
actual conditions which they illustrate. For instance, an 
advertiser can seldom sit down at the very beginning of his 
business career and "by taking thought" work out a plan of 
campaign which never will need change. The conditions with 
which the advertiser deals are not merely fluid, but they are at 
high pressure as well. There is not much exact knowledge 
about these conditions, but such as there is may be made 
useful. 

Every man familiar with advertising records could supply 
cases showing how the available means for studying the inter- 
relations of selling and advertising problems have been used 
profitably. Almost any really well worked out campaign 
shows how one after another of the problems we have presented 
here has come up for solution. Before we go on to a more 
detailed study of advertising and its relations to the successive 
steps in distribution suppose we look at a concrete case which 
illustrates some of the points we have made. 

THE STORY OF CARNATION MILK 

Take, for instance, the case of "Carnation Milk" as it is told 
by A. Rowden King of the Ethridge Company. It is interesting 



80 ADVERTISING AS A BUSINESS FORCE 

to see how many of the points we have made so far find concrete 
illustration in this story as it is told : 

*It isn't easy to revolutionize the public's buying habits. 
The young salesman of bottled water who was assigned the 
state of Kentucky complained bitterly of that fact. 

When the public wants meat, bread or candlesticks, it nat- 
urally turns to the butcher, the baker or the candlestick 
maker, as the case may be. 

The advent and growth of our modern department stores, 
those giants of retailing, have probably done more to change 
the public's habits of buying than anything else; but peculiar 
conditions of the manufacturing field are evolving quite as 
momentous changes in certain cases. 

It is 'particularly difficult for a manufacturer to bring about 
a change in the public's buying habits when he wishes to take a 

„. staple article away from one group of retailers who 

DifRculfu have always centred their business solely about it, and 

of give it to another group of retailers who have long 

Changing handled and would still continue to handle many other 

Buying staples besides the article in question. For instance, 

it was comparatively easy to make it seem natural 

for the public to ask for Rubberset Shaving Brushes and 

Gillette Safety Razors at the haberdasher's, or for camera 

supplies and stationery at the druggist's, or flower seeds at the 

grocer's. In these instances the new lines have simply been 

added to those already being handled by the retailers. 

But it is a very different matter for the Pacific Coast Con- 
densed Milk Company, manufacturing and selling Carnation 
ISIilk to attempt to transfer the nation's supply of milk 
Trying to from the hands of the milkman to those of the grocer, and 

PaHoAhe *o ™^^^^ o* *^^ ^^^^^^ '"^^^^ Modern Milkman." Milk 

Milk is the staple of staples, and an even more essential com- 

Business modity than sugar, which has always stood to the fore 

from the among the five thousand odd things which wholesale 

^^to^the^ and retail grocers almost invariably sell. That the Pa- 

Grocer cific Coast Condensed Milk Company has had such 

phenomenal success, that with the present season it has 

entered the field of national advertisers in an aggressive, large 

way, is why this story — a recital of that success — is timely. 

Certain remarkable statistics may well serve to clinch the 

* Advertising and Selling, May, 1912, p. 37. 



PROBLEMS OF MEDIUM SELECTION 81 

reader's interest. This company began doing business with 

one small condensery at Kent, Washington, in the fall of 

„ ,. 1899. Its output at that time consisted of 60 or 70 

Plant A cases of milk a day. To-day, not thirteen years after- 

Special ward, this company has fourteen immense plants in 
Product — the states of Oregon, Washington, Wisconsin and Illi- 

Remotc j^QJg j|. jjg^g jj-g q^jj ^.^^ factory with a capacity for 

from tts' m •• . iTt/ 

g^gf ' turning out half a million cans in ten hours. The 

Market story is told of little Tommy who went to visit his cou- 

and with sins in the country. He at once showed a lively interest 

D-'^l in the dairy. "How much milk does that cow give.'" 

he asked his uncle when he found him milking one 

day. "Don't give nothin'," replied that gentleman; "you've 

got to iake it from her." It has been much the same with the 

Pacific Coast Condensed Milk Company. Success has been 

wrought in the face of imminent defeat. From the present 

volume of business it would appear that success had been as 

easy as falling off a log; as a matter of fact, it has been more 

like selling water in Kentucky. Every inch of the ground has 

had to be fought over. 

In the selling and the advertising, prejudice has been the great 
stumbling-block, and educational methods to enlighten the pub- 
lic have been necessary from the start. In 1899 people 
Product thought that evaporated milk could not be manufac- 
and the tured without adding something to it; a chemical or 
Consumer something of that kind. That same prejudice is still 
at the jjjgi- with to-day, though to a less degree, due to the 
intensive advertising of an educational nature which 
has been done on Carnation Milk. The public has always 
tended to consider canned milk as something primarily of use 
in emergency cases when fresh milk cannot be had. 

E. A. Stuart, the head of the business, had been a wholesale 
grocer in Los Angeles. His business acquaintanceship in Cali- 
fornia was extensive. Yet the first year's results were 
The Dis- nothing short of discouraging. That year, with three 
Svltem°^t ^^ ^^^ salesmen and a number of women demonstrators 
the Start working, only about 1,200 cases were sold. During 
those early days the largest jobbers in the West, 
among them the wholesale house from which Mr. Stuart had 
withdrawn, Craig, Stuart & Co., doing an aggregate business of 
a million and three quarters dollars, did not average two cars 
a year. 



82 ADVERTISING AS A BUSINESS FORCE 

Yet Mr. Stuart was convinced that evaporated milk could be 
taken out of the emergency class and placed among the necessi- 
ties, and his belief was all the more strengthened when 
The Plan j^g found that certain of his competitors, who had 
Ihe Cam- been longer established, had been trying to get the con- 
mercial trol of his business away from him by roundabout 
Aspects means. It was in the days when the great country 
of Goods ^Q ^jjg northwest, the Klondike and Alaska, was open- 
Market '^^^ ^^P' ^^^^ ^^^- Stuart took suitcases of the milk out 
himself and retailed it, a few cases at a time, to par- 
ties then fitting themselves out for a dash in the Land of Gold 
to the north. 

These and other like experiences were hard, but they estab- 
lished the footing for the product. Gradually good salesmanship, 
combined with a little local advertising with paint and in the 
newspapers on the coast, had its results, and it was not many 
years thereafter when the necessity for more plants became 
apparent. The State of Washington, with its cool, pure streams 
and its green grass the year 'round, had proved an ideal locality, 
and the additional western plants which have been built are in 
that state and in Oregon. 

Certain principles have been strictly adhered to from the be- 
ginning in the Carnation Milk selling scheme. The company 
has been a stanch supporter of the strictly wholesale 
r/ie grocer. Says Mr. Stuart: "We do not favor selling 
Selection gyen semi-jobbers. We endeavor to strongly protect 
btition' the jobbers' interests. We realize we cannot carry 
Plans water on both shoulders and we want to work in 
harmony with the jobbers. I have turned down 
many an order, when it has seemed hard at the time and when 
I was anxious for business, to protect the jobber, knowing 
that, if I filled the orders, I would create ill will. Often a semi- 
jobber has sent in an order for Carnation in carload lots and it 
has been a temptation to fill it, but we have had the backbone 
to say: 'No, sir.' For that reason, in the localities where we 
have Carnation Milk well established and the jobbers know of 
our policy of doing business, they will stand to the front and 
help us fight our battles." 

Mr. Stuart also has his well-defined opinions on the question 
of overstocking retailers and jobbers, which is often attempted 
in so many lines and especially in the grocery trade. Saj's he: 
" I would rather sell a man 25 cases once a week than 100 cases 



PROBLEMS OF MEDIUM SELECTION 83 

once a month. To sell the retailer or jobber what he considers 
to be his requirement for a given period is a whole lot better 
than doubling that amount for a longer period. It creates a 
better feeling and reinforces the confidence of a buyer in Car- 
nation Milk if he is compelled to purchase Carnation Milk often. 
"I overstocked two merchants in San Francisco once. They 
gave me orders for carloads more as a compliment than any- 
thing else. I called on them a month or six weeks after delivery 
and they told me the milk was selling very well. I called on 
them in about four months and they said it was selling slowly 
and they seemed to be discouraged. I did not want them to feel 
that way about my product, so I asked them how much they 
had left. One had 285 cases out of 500 and the other had 225 
cases, and I took the surplus milk off their hands and gave them 
my check for it. I told them I would be glad to supply them 
thereafter with what they thought their trade would require. 
A little later they gave me orders for 25 cases a week and it was 
not four weeks until they replaced these orders with carloads, 
and since then they have bought hundreds of carloads. They 
simply had got discouraged because they were overstocked, 
and, by taking the milk off their hands, I renewed their confi- 
dence and they were able to sell more goods." 

Until the present year, the advertising account has solely 
consisted of outdoor publicity; that is, painted walls, painted 

bulletins, posters and car cards. This has been sup- 
Ch f pl^i^^nted by a little local advertising, at times, in the 
Mediums newspapers of the big cities. In the fall of 1907, for 

instance, paint was used on walls and boards in the 
Far West and car cards were used in Chicago, St. Louis, 
New Orleans, Pittsburgh, Detroit, Toledo, St. Paul, Minne- 
apolis, Kansas City, Omaha, St. Joseph, Sioux City, and 
Duluth. The Mahin Advertising Company, Chicago, which 
has developed the account from its inception, has seen the scope 
of the outdoor advertising on Carnation Milk grow until this 
year all varieties of outdoor advertising are being used through- 
out the country in forty-two big cities and surrounding terri- 
tories. 

In its educational advertising the Pacific Coast Condensed 
Milk Company has not only had the antipathy of the public 
in general against all canned milks, but it has had the com- 
petition of other canned milks, selling at a lower price per 
can. 



84 ADVERTISING AS A BUSINESS FORCE 

But Mr. Stuart has felt the courage of his convictions. He 
went into the business because he beUeved that it had a big un- 
foreseen future ahead of it. He has felt that raw milk, 
A New as it is left at the consumer's back door by the milk- 
Idea of the man, is unclean, germ-laden and disease-breeding. 
Goods Was Furthermore, he has known that raw milk is expensive 
in "^ Minds because the fastest and most costly train service is 
of Dealers necessary in its transportation, and because elaborate 
equipment and an army of men are required for door- 
to-door distribution. The cost of fast trains and of fast dis- 
tribution comprise more of the cost of a quart of raw milk 
than the milk itself. 

Mr. Stuart has combated the popular belief that canned milk 
is only advisable when raw milk cannot be had (as on explo- 
ration expeditions, on the frontier, in camps, etc)., from the very 
first. He has shown the grocer that in making him "The 
Modern Milkman," Carnation Milk is for him a constructive 
and creative force, enabling him to secure and hold a business 
which he formerly could not get away from the milkman. 
He has shown the grocer that most new products which are put 
on his shelves prosper, if they do at all, at the expense of the 
other products which he is already handling by reason of a 
different dash of flavor or of color or of carton. The margins 
of profit being equal, the grocer would just as soon handle one 
such product as another. But Carnation Milk opens a whole 
new business to the grocer. It is possible for him to add a milk 
route to his grocery route without additional trouble and with- 
out danger of loss through spoiling. A family spends, on an 
average, $3 or more per month for milk. 

In advertising Carnation Milk to the consumer the endeavor 
has been to show that Carnation Milk is not made, not manu- 
factured, that nothing has been added to pure fresh 
The At- jjiii]^ iq obtain Carnation Milk, and only water has 
Consumers been removed; that imperfect milk could not be thus 
canned because it would sooner or later burst the tin. 
Early in the advertising the phrase was used: "Carnation 
Milk — From Contented Cows." The latter phrase, combined 
with ever-present scenes of cows grazing in green, quiet pastures, 
has magnified the idea of sanitation and efficiency. . . . 

Two or three years ago the Pacific Coast plants of the Pacific 
Coast Condensed Milk Company became entirely inadequate 
to supply the demand. Indeed the trade had grown so that 



PROBLEMS OF MEDIUM SELECTION 85 

certain jobbers who had worked up handsome increases in their 

sales were unable to get the goods to meet their requirements. 

It was evident that additional plants were necessary. Mr. 

Stuart saw that the big future sales of Carnation Milk were 

„ p destined to be in the Middle and Eastern states, and 

duction ^^ ^^ endeavor to save the heavy freight charges from 

Conditions the Pacific Coast, he made a careful investigation of the 

Due to Ad- dairy conditions in the states of Wisconsin and Illinois, 

vertismg ^j^^ ^^^^ year erected three big new plants in Wisconsin 

and one in Illinois, each capable of turning out 

about 2,000 cases of milk a day. 

This development had a very direct bearing upon the present 
big advertising campaign, the first of national scope. It came 
about in this way : In the old days, with only the Far Western 
plants, the company had advertised contented cows eating 
"green grass the year 'round." The pictures used had shown 
cows eating the perpetual grass of Washington and Oregon with 
the typical snow-capped mountain scenery of those parts in the 
background. 

But green grass could not be had in the states of Wisconsin 
and Illinois the year 'round, and the jobbers knew it. When 
some of them learned of the new plants, they wrote requesting 
that they continue to receive shipments only from the Far 
Western plants. "This," says Mr. Stuart, "rather put it up 
to us to prove that, even without green grass the year 'round in 
Wisconsin and Illinois, it is possible to have contented cows and 
the best quality of milk." 

In order to set the trade right, about fifty men were invited to 
be the guests of Mr. Stuart on a four-days' tour of inspection 
through the new plants last fall. A private train was chartered. 
These men were chiefly brokers who sell Carnation Milk in 
different territories in all parts of the country, from Los Angeles 
to Boston, from San Antonio to Butte. 

But the all-important fact, from the point of view of the 
advertising man, is the fact that at the meetings of these men 
on this trip it was planned to confer as to the best way of 
going about the first advertising campaign on Carnation Milk. 
And to help in that confere"nce, the following advertising men 
were also invited along: John Lee Mahin, Wilbur D. Nesbit, 
M. O. Smith, B. S. Presba, and F. M. Lillie, all of the Mahin 
Advertising Company; A. P. Johnson, Chicago Record-Herald, 
and M. F. Reddington, Thos. Cusack Company. 



86 ADVERTISING AS A BUSINESS FORCE 

Meetings were held every day on that trip at which the sales 
and advertising problems were discussed. Finally, at the last 
meeting, when views had crystallized, Mr. Mahin asked each 
broker to write out his suggestions, based upon his knowledge 
of local conditions, as to what the advertising should be. "We 
want to have your opinions," said Mr. Mahin. "Of course 
we cannot follow your suggestions in every case, but we want to 
have them and to give them careful consideration." 

As a result of the very valuable ideas which these brokers 
contributed, the present advertising campaign has been planned, 
p. . It consists, as has already been mentioned, of outdoor 
aNew^ advertising of every type in, and radiating out from, 
Campaign forty-two big cities. Thirteen full pages of copy have 
on been prepared to be run in the big newspapers in the 
National j^jg cities. And full pages and full column advertise- 
ments of Carnation Milk — many of them in three 
and four colors or lithographed — began running in the March 
and April issues of the following national magazines: Ladies' 
Home Journal, Saturday Evening Post, Woman's JVorld, Ameri- 
can Sunday Magazine, Delineator, Designer, NeiD Idea, House- 
keeper, Christian Herald, Ladies' World, and Ulusirated Sunday 
Magazine. 

In addition, a supplementary campaign will be run in the 
recreation publications. One hundred and twelve lines will be 
run twelve times in Outing, Recreation Sports Afield, National 
Sportsman, Field and. Stream, Forest and Stream, Outdoor Life, 
Outers' Book, and Hunter, Trader and Trapper. 

The copy makes an interesting study. Naturally, with the 
coming of the Middle West factories, the reference to cows feed- 
ing on green grass the year 'round, and the snow-capped peaks 
in the background of the grazing scenes, have been omitted. A 
vital feature of the campaign is a positive guarantee carried 
in the full-page copy, reading in part as follows: "Order a 10- 
cent can of Carnation Milk from your grocer, and if you find 
that Carnation Milk does not please you better in every way 
than fresh, raw milk, or than any other evaporated milk or 
condensed milk, write us and we will cheerfully refund your 
money and postage." 

Every piece of copy of whatever size is strongly educational. 
The advantages of Carnation Milk are emphasized, which is 
simply "pure, wholesome milk to which nothing has been added 
and from which nothing has been taken away but water" as 



PROBLEMS OF MEDIUM SELECTION 87 

compared with ordinary, raw milk, which is "hauled 100 or 200 
miles in large, presumably clean, cans, in express cars, bumped 
and jarred, dumped out on platforms in the sun to be handled 
by grimy fingers, bottled in a dimly lighted room and delivered 
on your back step before daylight." 

The comparison is also made between Carnation Milk and 
the old-time condensed milk, "thick, stringy, ropy — with 
sugar added which gave it body." 

In addition, every advertisement pictures and describes 
one excellent use for Carnation Milk, as, for instance, for school 
children, on the picnic, for the baby, in cooking. The reader is 
urged to send for a book of recipes which describes scores of 
other uses. All of this educational advertising is aimed at the 
deep-seated public tendency to put canned milks in the emer- 
gency class. 

In addition, of course, a splendid set of cut-outs, window 
displays, and other dealer-aids have been prepared and the 
grocer is urged to send for them. 

A very handsome twenty -page book of about the page size of 
Collier s, printed in three colors and called the Carnation Herald, 
has been prepared and sent to the grocers. In it the whole 
Carnation story is told from many different angles as well as the 
facts about the present year's campaign of advertising, pre- 
sented in a form that must convince. 

REVIEW QUESTIONS — CHAPTER IV 

1. What is Printers' Ink's estimate of the total United States 
outlay for the twelve types of advertising in their list.'* 

2. What is being done to put advertising on a more stable 
basis in some of the leading lines? Are these improvements 
being made at the instigation of the public, the advertisers, or 
the operators of the mediums themselves .f* Who gets the most 
benefit? 

3. What was the plan of the cap manufacturer for making 
his national and local advertising work together? How did it 
work? 

4. If you were asked to name the best type of medium for 
advertising men's caps, what would you have to know about 
the plan of campaign before you could answer? 



88 ADVERTISING AS A BUSINESS FORCE 

5. What did the Pacific Coast Condensed Milk Company- 
plan to do with its advertising? With what success has it met? 

PROBLEM QUESTIONS — CHAPTER IV 

1. In the Carnation Milk campaign two "slogans" have 
been largely employed: "The Modern Milkman," and "From 
Contented Cows." Each appeals to a different element in the 
market, and in a different way. Analyze these, and compare 
them, their appeal, and their possible effects. Do you think 
the two together are better than either alone would have been? 
Could you suggest another to go with these, making a new appeal 
in a new way, and working in harmony with the rest of the cam- 
paign as outlined? 

2. A piano company recently paid an eminent pianist 
$80,000 to use their piano on tour. Would you call him an 
advertising medium? Was the special tour of jobbers to the 
Carnation eastern plants an advertising medium? Can you 
make a list of five types of mediums in general use not included 
in the Printers' Ink table quoted? Can you make a list of ten 
advertising mediums which are not, but which might be, used 
in advertising a grocery specialty? 



CHAPTER V 

ADVERTISING AND THE CONSUMER 

THE consumer of to-day is not merely an individual with 
a need which he seeks to have filled by proffered mer- 
chandise for sale. He is an individual with a need, 
plus certain more or less well-formed prejudices about his need, 
plus a more or less open mind. This combination of needs, 
notions, and susceptibilities is the central object of attack for 
all advertising aimed at the sale of goods consumed at retail. 

An unsigned article in Printers' Ink sets forth this phase of 
the consumers' position as follows: 

*In 1911 when the consumer buys, he does the choosing. He 

asserts his particular individuality. He expresses his likes or 

dislikes down to the most subtle differences. He 

7%e weighs values between this and that brand of a 

Consumer similar product. He discriminates, he wants ivhat he 

wants — and he gets it. 

Advertising has made this choosing possible for the consumer. 
In the decades past, soap was soap. Wheat was wheat. 
Coffee was coffee. Paint was paint. Razors were razors. 
When the periwigged consumer of 1811 wanted soap, he went 
to a druggist's — or was it an apothecary? — and mildly asked 
for and accepted a cake of soap. Perhaps he never heard of 
any soap but what was rudely made at home! That was all. 
But the consumer of 1911 knows that soap is no longer merely 
soap. Advertising has taught him that there is Pears' "match- 
less for the complexion"; Williams' "that won't smart or dry 
on the face"; "Ivory," "99.44 per cent, pure"; Packer's, 
Colgate's, and a host of laundry soaps. Each has a very dis- 
tinct and separate value, and a logical but specialized appeal. 

The modern consumer decides whether his complexion will 

*Printers Ink, January 26, 1911, p. 59. 

89 



00 ADVERTISING AS A BUSINESS FORCE 

be improved by Pears', or whether Colgate's will do it more 
good. Or if he is absent-minded, and apt to mislay the soap 
when bathing, he will buy Ivory, for "it floats," and is espe- 
cially adapted to the use of absent-minded persons. And his 
wife will decide why she prefers Swift's Premium to Armour's 
Star, Babbitt's to Fels-Naptha, or some other product. Ad- 
vertising has increased the number of soaps, because it has 
made possible a larger exercise of the consumer's individuality. 

The consumer of 1811, with her panniers and pompadour, 
bought wheat from which to make her porridge. But wheat 
in 1911 is no longer wheat. We are living in the beardless age 
and the breakfast food era. An assortment of wheat foods 
confronts the woman of to-day which would make her ill from 
indecision if she were not the well-poised woman that she is — 
Maple Flakes, Shredded Wheat, Grape-Nuts, Apetizo, Egg- 
0-See, Malta Vita, Cream of Wheat, Pettijohn, Ralston — and 
these are only a beginning! 

And the son of the periwigged consumer of 1811, did he 
choose his make of razors and collars and suspenders and shot- 
guns? Odd's Bodkins, he did not! He was lucky to get any 
nameless, nondescript or home-made contrivance. To-day 
his great-grandsons choose in just what manner, shape or form 
they will be shaved or shave themselves, selecting from among 
at least 100 possible choices. 

Not only has advertising enabled the consumer to have a 
large variety from which to select, and thus express his indi- 
vidual taste, but it has educated the consumer into being a con- 
noisseur — which apt word means "one who knows." The 
modern consumer is "one who knows." Formerly a man who 
was called a connoisseur was one in a thousand. He was sup- 
posed to know more than his fellows. He was probably rich, 
had traveled, and was an authority on matters of art, taste, 
food, music. When his friends wished to make important 
purchases, they came to him, because he knew more. 

But to-day advertising tends to make all consumers into con- 
noisseurs. It has been a great free correspondence school in 
merchandise. People without taste have been edu- 
Aclvertistng ^ated into taste by advertising campaigns in fur- 
Consume7s niture, wall coverings, architecture, clothes, and an 

Wants endless number of things. Their art standards are 

heightened by such advertisers of pottery as the Tecco 

and the Rockwood. Piano-makers have informed them about 



ADVERTISING AND THE CONSUMER 91 

tone and touch. They have learned scientific facts about food 
values (witness the strenuous advertising of the bean-canners 
the Armour, Swift, and Libby concerns, to say nothing of the, 
flour, chocolate, coffee, biscuit, and endless canned-goods firms). 
They have the best art brought to their notice by the Perry 
Pictures and the Copley Prints. The consumer of to-day 
is his own connoisseur. 

It is this quality of knowing what he wants and why, that is 
the best safeguard the modern advertising manufacturer has. 
If an advertiser can teach a consumer strong, mental reason 
why he prefers a certain product, and can make him refuse all 
substitutes, that advertiser has a far firmer hold on his trade 
than any other manufacturer. When the consumer chooses 
for himself, and has established his individual taste for a certain 
brand of product in preference to all others, he is bound to 
"take no substitute." He is also apt to become a permanent 
customer. . . . 

The Stetson Shoe Company is doing something good along 
these lines. It has issued a booklet on "The Right to Know" 
how shoes are made, showing this important 
^ ^"^^^-^ fact: the toughest leather is down the spine or 
Education backbone of the hide, and it wears longer and better 
than leather from the softer outer portions. The 
Stetson shoes, it is explained, are made of this part, therefore 
give better wear than shoes not so made. If you want a well- 
wearing shoe, insist on getting shoes made from the backbone 
leather. Such a specific argument "bites" and develops con- 
sumer individuality. Consumers are expressing their indi- 
viduality in the most minor articles. Take toothbrushes. The 
consumer no longer buys any old bristles to remove the unsani- 
tary fragments from his molars, but purchases a prophylactic, 
or a special design of some sort. 

The merchandising plans and entire distribution organization 
are being affected by this growing consumer individuality. It is 
going to be the big thing for manufacturers and distributors 
to take account of more and more. 

THE WILL OF THE CONSUMER 

The modern consumer, then, it should be clearly realized at 
the start of any discussion of his place in the distribution 
of merchandise, is not merely a combination of needs, notions. 



92 ADVERTISING AS A BUSINESS FORCE 

and susceptibilities, but he is a combination which is constantly 
changing and being changed. No man can foretell in advance 
exactly what results are to follow from any given appeal to this 
volatile composite, although it is possible to know beforehand 
pretty definitely what the general nature and limits of those re- 
sults are to be. If the consumer were an inert, helpless mass it 
would not take long to reduce him to laws. But both indi- 
vidually and collectively he has a luill, which must be considered 
in connection with any appeal to him, even if this will does not 
become the main object of attack. And this wull never is inert. 

At the meeting of the American Economic Association, in 
Washington in December, 1911, Prof. T. N. Carver, of Harvard 
University, said: 

"It would be an interesting and illuminating statistical 
investigation if we could count and tabulate the agencies of 
'high pressure business.' If we could arrange two 
chology of columns of figures, one giving the number of courses 
Attack and of instruction on the psychology of salesmanship, the 
other giving the number on the psychology of resist- 
ing salesmanship; one giving the number of articles in busi- 
ness journals on how to make sales, or how to get orders, 
the other giving the number on how to avoid buying what 
you don't want, or how to avoid giving orders, the result 
would be illuminating. We should probably find a parallel to 
Guizot's famous generalization regarding the relative efficiency 
at different historical epochs of the forces of attack and the 
forces of defence. In this case we should find the individual 
bent on defending his income and his meagre savings, while a 
great array of forces is bent on attacking them. Just as gun- 
powder and cannon made the forces of attack superior, and 
changed the political condition of Europe, so now, wood-pulp 
paper, cheap advertising, and shrewd salesmanship are making 
the forces of attack stronger." 

The consumer is the point of attack, either immediately 
or ultimately, in every advertising campaign for advertising 



ADVERTISING AND THE CONSUMER 93 

goods finally sold at retail. And while we are discussing 
methods of attack, is it not well to take stock of the con- 
sumer's defence? What are the characteristics of the 
^^^ , consumer as a class which meet, and, in a measure, 
Defences ofiFset advertising and selling betterments ? Space will 

not let us catalogue more than a very few : 
(1) The consumer's spending power is limited by his earning 
ability. He may develop, or have stirred in him, new wants, 
strong enough to make him work harder in order to earn more, 
but he cannot honestly spend more money than he earns, no 
matter how complicated his wants may become. This sets a 
final limit on consuming capacity, and sets a limit to the exer- 
cise of his will. 

("2) The strength of the consumer's savings instinct deter- 
mines the margin between his earning power and his willingness 
to spend. The strength of this instinct is only relative and 
here the consumer is vulnerable. His "will to save" is elastic. 

(3) The "standard of living," the opinion of the class to 
which the consumer belongs as to what may be expected of 
him in the spending of his income, has its constant effect on 
a civilized man's conduct, and this again is relative and open 
to attack. 

(4) Price habits have tended to become fixed in many 
lines of retail business. The consumer has come to accept 
an increasing number of set prices, and set price intervals. 
There may b3 a few places in this country where a man expects 
to find a necktie line regularly carried at some price other than 
50 cents or $1 or upward, but they are few. And so it is 
with suspenders, shirts, shoes, sox — almost everything a man 
wears — certain price habits have become well established. 
This puts competition in these lines on a basis of quality, or 
service. It makes purchase easy for the consumer, but it 
modifies the character of the advertising appeal, as we shall 
see. 

(5) Buying habits are undergoing modification also. And 



94 ADVERTISING AS A BUSINESS FORCE 

these make another change in the advertiser's position. With 
price "higgling" partly eliminated, and the whole problem 
of appeal and sale based on quality and guaranteed satisfaction, 
the consumer has come to expect that goods can be bought 
without bargaining. The consumer certainly is safer in his 
purchasing, but equally certainly he is more careless. 

(6) And again there is the effect of the multiplicity of ap- 
peals being made to the consumer. The individual consumer 
and the consumer as a class is appealed to from so many sides 
that the effect of no single appeal can be what it would if it 
stood alone. 

To sum up these consumer defences we find that, while the 
consumer, as an individual or as a class, may be led, stimulated, 
diverted, directed or otherwise influenced in buying, there are 
certain roughly ascertainable limits to the effects which may 
be expected to follow attacks on the will of the consumer. 
There are certain limits beyond which his earning power will 
not let him go, there are others, less certain, beyond which he 
will not buy unless his saving impulses are stifled, there are 
social and commercial habit barriers to consumer diversion 
and last of all, the appeals to the consumer may partly neu 
tralize each other by their mere multiplicity. 

Any one of these six defences viewed from the advertiser's 
standpoint would show elements which cannot be ignored 
with safety in an advertising plan. And these are only six 
out of an innumerable company which might be mentioned. 
But these will serve to show how powerfully runs through 
advertising, of whatever kind, this continuous ebb and flow of the 
forces of appeal and resistance. An appeal to "buy my soap" 
must be much more than a pretty picture or a cordial invitation, 
or even an effective appeal to reason. It must take account 
of all the collateral forces at work on the soap buyer at the time 
when he buys soap. And with greater or less elaboration the 
same thing is true in the selling of real estate, or books, or 
anything else. 



ADVERTISING AND THE CONSUMER 95 

There are few cases in which the resistive power of inelastic 
income and the savings instinct (in this case working in com- 
bination) are better illustrated than in the recent 
on the Encyclopaedia Britannica campaign. Here is a com- 
Savings modity for which every man with an interest in living 
affairs has at least a vague desire, but which compar- 
atively few would normally feel they could afford. The great 
problem was to make a fair portion of the possible market 
feel that, income and savings instinct considered, the price was 
not prohibitive. This was accomplished in a remarkably 
clever way. The price was split up into sections so that it 
looked small. It was then explained that a delay in purchasing 
meant some actual money loss, due to a necessary indefinite 
price increase after a set date. And the price obstacle was 
attacked indirectly also, by treating it in all the advertising 
as if it were negligible detail compared with the value of the 
work as a compilation and its beauty as a set of books. The 
campaign is thus described by Lynn G. Wright, Managing 
Editor of Printers'' Ink: 

*Few campaigns carried on in this country have 
demanded more pressing activity or witnessed a more successful 
working out of plans laid necessarily several months in advance. 

Over in the Cambridge University Press offices in West 
32d Street the pressure was terrific. The four-page colored 
inserts in the magazines, the trade-journal copy and the driving 
daily paper copy running frequently to full pages, set inquiries 
in motion toward the publishers' offices. . . . 

Every inquiry demanded an answer and a prolonged follow- 
up. The slightest show of interest brought upon an inquirer 
a lengthy procession of booklets, prospectuses, testimonials, 
statistics and authoritative indorsements, to say nothing of 
hurry-up letters which pictured the swift-approaching date of 
May 31st, when up would go the price of the Encyclopaedia 
several dollars a set. 

While there were literally miles and miles of advertising 
copy, it was written about this chief "talking point" — the 

^Printers' Ink, June 15, 1911, p. 9. 



96 ADVERTISING AS A BUSINESS FORCE 

remarkably smaller size of this edition because of the use of 
thinner paper. In as many varied ways as copy writers' in- 
genuity could devise, the point was made that the separate 
volumes could be held easily in the hand and could be taken 
to the fire and consulted for pleasure as well as information. 
The wonderful compactness of the volumes was illustrated by 
cuts in the advertisements and by window displays in bookstore 
windows. The follow-up literature convinced the prospect 
of the wealth of contents and of the authoritativeness of the 
names of the editorial staff. 

And again that recurrent warning : "Hurry! After May 31st 
you will have to pay a good deal more for these books." 

It was explained why the set could be given more cheaply 
by subscribing before May 31st: 

"The reason for offering special prices at all to prompt sub- 
scribers was purely a material one, the whole situation being 
governed by consideration of manufacture. In order that the 
manufacturing may be completed economically and rapidly 
it is essential that the total number of sets for the first dis- 
tribution shall be accurately determined by the last day of 
this month, and then all of the remaining copies that will be 
required to execute orders registered by that date will be com- 
pleted as one continuous operation and with the utmost dispatch. 

"There is, indeed, no industry in which the economy of manu- 
facturing upon a large scale is more evident than it is in the 
printing and binding of a book, and manufacturing upon a 
large scale means, in this case, not only the printing of a large 
number of sheets and the binding of many thousands of volumes, 
but also the printing and binding of this large number without 
interruption. All whose applications are posted before May 31st 
are entitled to the lowest price, because their orders, being 
received while the whole machinery of production is still in 
motion, will be executed as a part of an unbroken series of 
operations." 

All of which is good sense, and was so generally recognized. 
But the first few months brought orders only in driblets. By 
the middle of May the total had reached about 20,000. 

The advertiser then turned on more "power." Warning 
copy was hurried to the dailies of all the larger cities of the 
United States. Daily reports were printed of the number of 
orders received. The copy took on, more and more, those 
specific new features that are known to be good action pro- 



ADVERTISING AND THE CONSUMER 97 

ducers. May 31st was pressed into the minds of millions of 
readers as the last day of opportunity. They must have 
dreamed about it — and then delayed a little while longer. For 
the real action did not begin till after May 20 th. On May 18th 
23,000 applications had been registered. On May 24th these 
had jumped to 26,154 and were so reported in the advertising. 
"Only seven days left" a 60-point John Hancock caption flared. 

There was an upheaval in the United States mails and two 
days sufficed to show 27,515 orders. One or two more pressing 
invitations to act, and on May 30th 29,790 names were enrolled 
on the order books. 

On the morning of May 31st the last ad was published. In 
addition to the forceful reminder carried, it included a facsimile 
Western Union telegraph form, so prepared that it needed but 
little more than the sender's signature to complete the order 
for the books. Orders not mailed or telegraphed before the 
stroke of midnight v/ould not be booked. 

That was a stirring day in West 32d Street. Messenger boys 
filed into the Builders' Exchange building in a stream. The 
bags of the letter carriers grew more plethoric with each delivery. 
The order clerks in the Britannica offices on the tenth floor 
forgot their lunch in their vain endeavors to keep the stacks 
of letters and telegrams from toppling. Oliver McKee, the 
English sales manager in charge, came near to uttering an 
exclamation, so near did he come to losing his reserve, as his 
excited assistant reported the doings. One of the final orders 
was from a corporation head who asked for fourteen sets, one 
for his yacht, one for his home, and the rest for his executives. 

Two days later the checkers were able to make a close approxi- 
mation of the total bookings. Orders ran to over 32,000 sets — 
increase of nearly three thousand in a single day. Advertising 
did it; 30,000 lines were used in the newspapers. Over $75,000 
was spent in the last thirty days. . . . 

The results described as coming from this campaign were 

clearly achieved mainly by attack on the savings instinct. Few 

. campaigns illustrate this so clearly. But the same 

the principles figure largely in the sale of nearly all 



r.. 



'o^?ner'5 articles involving a large initial outlay. Talking 
machines, piano players, and automobiles are note- 
worthy examples of commodities of this type. 



98 ADVERTISING AS A BUSINESS FORCE 

Attacks on "standards of living" shade ofiF from these ahnost 
imperceptibly. These often take the form of attempts to get 
people to buy more than enough to satisfy their normal wants. 
This type of appeal and some of the methods employed in 
making it are thus described by Waldo P. Warren : 

*Did you ever go into a haberdasher's store to buy a box of 
collars and come out the possessor of four shirts, three cravats, 
several suits of underwear, and a sporty vest.-* 

If so, you came in contact with one of the biggest principles 
of business promotion — the principle of getting people to buy 
more. 

And if you observed carefully the methods of the salesman 
who waited on you, you caught a glimpse of how it was done. 
But the chances are you didn't realize at the time that you 
were dealing with a conscious artist — you thought you were 
doing it of your own free will. You were, in fact, and right 
there's where the art of the salesman comes in. 

The principle and the effect are the same when applied to 
advertising. 

The salesman does it by assuming that you came in to buy 
more than that box of collars. He didn't limit his opportunity 
by thinking of you as a "collar customer." He assumed that 
you were in a buying frame of mind, and that collars were your 
starting point. You found that he had a better opinion of you 
than you had of yourself, and you instinctively responded to it, 
and were unwilling to admit that you were not as good a spender 
as he thought you were. 

The manufacturers of men's clothing recognize the great 
power that lies with the retail salesman, not only to sell their 
goods, but to sell more of them. One of the big clothing manu- 
facturers of Rochester inculcates the idea, not only in its 
advertisements, but through its dealers to the actual working 
policy of the retail salesman, that a man gets better wear out 
of two suits at $25 each than he will out of one tailor-made suit 
at $50 or one of the higher-priced ready-to-wear suit^. 

A handkerchief manufacturer finds that the man who 
dropped in to buy one handkerchief, because he had left home 
without one, will just as readily buy tliree if he finds they 



"Printers Ink, November 16, 1911, p. 32. 



ADVERTISING AND THE CONSUMER 99 

come also in packages of three at even money. And the 
advertising prepares him for the transaction by mentioning 
the various packages containing one, two, and three hand- 
kerchiefs each. 

The manufacturer of 3-in-One Oil "gets people to buy more" 
by putting the oil up in a bigger bottle, and giving more oil 
for the same money than in the smaller package. The desire 
to buy at the best price is instinctive, and when a larger sale 
can be made in one transaction it is often possible to utilize 
this instinct, even when the bargain does not come out of the 
manufacturer at all, but out of the possible profit of the dealer 
on two sales instead of one. 

A well-known mail-order house in western New York has 
made a gigantic success with the principle of getting people 
to buy more. By offering premiums for club orders the mail- 
order house gets a great deal of extra business — ordinary 
household articles that otherwise would be bought at the grocery 
store, but put in with the order to make it amount to ten 
dollars. 

The "assortment idea" is by no means a new one, and is the 

avowed secret of the success of many great enterprises. Butler 

Brothers, perhaps, represent the conspicuous maximum effect 

of the application of that idea. Their first stock, based on this 

idea, was so small that it is said they had to pile up empty 

packing cases halfway back in a twenty-foot storeroom to 

make the place look full enough. But the "assortment idea" 

was there, and people "bought more" than if each item had 

been offered individually. To-day the largest warehouses in 

six cities, and perhaps the largest list of dealers ever reached 

by one concern, attest the value of the plan. The plan, plus, 

of course, but nevertheless the plan — "getting people to buy 

more." . . . 

.* 

And this attack on standards of living is not merely a matter 

of increasing the wants. It involves, in many cases, problems 

Refinina ^^ refining wants already existing. To get people 

Existing to buy a better grade of goods, pay full price for it, 

"" ^ and be satisfied with their purchase is merely another 

way of attacking them through their "standards of living." 

The writer just quoted (Waldo P. Warren) calls this "Getting 

People To Pay More." Concerning this he says: 



100 ADVERTISING AS A BUSINESS FORCE 

*As a past master of the art of " getting people to pay more " 
I think no one who knows would dispute the claim of Marshall 
Field. I do not mean paying more for a given quality but 
appreciating a better quality and paying what it is worth. 
The day has passed when "getting people to pay more" for 
a given quality is regarded as a virtue, or even as a good business 
principle. The whole tendency of experience is to demonstrate 
that value giving is the only sure highway to success. 

Marshall Field had a maxim, which in his quiet way he 
dropped more than once in those casual conversations with 
executives and department chiefs, and by which means he 
succeeded in so infusing his spirit into the personnel of a vast 
organization that it would go the way he desired it to go while 
he enjoyed a six months' holiday in Eiirope. That maxim 
was: "The appreciation of quality remains long after the 
price is forgotten." 

I have heard it quoted many a time by various department 
chiefs with whom it was formerly my pleasure and privilege 
to come in contact, and quoted with all the finality with which 
a religious zealot points to his "proof text" of Scripture, in 
explanation or justification of a merchandising or advertising 
policy. 

One day in particular I remember standing by the counter 
where women's shopping bags were displayed, and falling into 
a conversation with the department chief whose simple juris- 
diction included those articles. A new stock had just been 
put in and he was taking a justifiable pride in showing me what 
exquisite creations were included in the display. Some of 
them were marked at $50, $60, $75, etc., and from that on down 
to $5. (Notice I did not say $49.95, etc.) I said to him: 
"Do you have much trouble in disposing of bags at that price.? " 

"We're not very anxious to dispose of them (it all," he replied. 
"You see it is well worth while to carry those bags in the case 
even if we never sold them. Of course we do sell them occa- 
sionally, but they're worth more to us if we keep them." 

"Why, how's that.?" I asked — that was before I had learned 
much about the psychology of merchandise displays. 

"Well, you see, a man will come in here to buy a bag for his 
wife, or she will come herself for that matter, and have in mind 
paying $5 or $10 dollars. But when they look over the assort- 
ment a nd see that, while they can get a fine-looking bag for 
* Printers Ink, December 28, 1911, p. 36. 



ADVERTISING AND THE CONSUMER 101 

that money, there are others on up to several times that sum, 
it simply lifts their conception of what constitutes a desirable 
shopping bag, and they end up by paying $25 or $30. The 
more expensive bags haven't been sold, and yet they have 
earned half their cost on that one transaction — at least one 
of them has. 

"Then," he went on, "that woman goes out with her fine 
bag and sets a new standard for her friends, and they come 
in with $20 ideas and may end up with $40 purchases." 

"Do you think that is quite fair to the publicf*" I asked, as 
personal recollections of the monthly "Field bill" came to my 
mind, and I remembered a remark I had often heard in expla- 
nation, "Things cost so much more than you think they are 
going to." 

"Why not.f*" he asked, as if his personal ethics had been 
questioned. "They got good value; they got what they chose; 
they had the whole assortment to choose from. They could 
have bought a good bag for $5 or $10, but they preferred to 
pay more. Why should I limit them to cheaper bags if they 
prefer to pay for something better? " 

The argument ended with the proof -text maxim, "Mr. Field 
says, you know, that 'The appreciation of quality remains long 
after the price is forgotten.' " 

I have since had occasion to observe how the same principle 
works in other lines of trade, and also how the same effect is 
secured by other methods. 

One of the higher-priced makes of automobiles is marketed 
by men who have discovered that there are many persons who 
demand and are willing to pay for the best that can be produced. 
Let others stint their product in materials, proportions, and 
finishings — but why compete with them when there are enough 
who are willing to pay for an unstinted production. And yet 
the problem remains of selling the intangible margin of differ- 
ence, something that even appearance does not always show. 
It is done not by arguing superior utility, but by investing the 
car with a prestige or "halo" which irresistibly connotes more 
refined taste in the owner, and human nature, when it can afford 
the difference, does the rest. 

Fortunately for many propositions where it is necessary 
to ask a higher price it is possible for them to demonstrate 
an actual economy, and then the problem is easy. When the 
"Twentieth Century Limited" between New York and Chicago 



102 ADVERTISING AS A BUSINESS FORCE 

can point to the saving of a business day, which to many 
business men means hundreds of dollars, the question of whether 
or not it is worth while paying $10 extra fare vanishes into 
thin air. 

Even in the matter of prunes a leading New York grocer 
has demonstrated that a pound of large prunes at fifteen cents 
is better value than a pound of small prunes at ten cents, when 
the seeds are weighed separately from the fruit. It has been 
found possible to demonstrate this point to many of the most 
frugal of housewives, so that the fine large fifteen-cent prunes 
no longer suffer in competition with the ten-cent grades, . . . 

Utilizing existing reputation, as a means of getting people to 
pay more, is exemplified in the phonograph business. Records 
for a long time were sold at a standard price of 35 cents 
and 25 cents, but it was found possible by drawing on the 
existing reputations of great singers to market records at $7 
each. 

Of course there is a real difference in the quality of the music, 
and yet there are doubtless many purchasers who have more 
feigned than actual ability to appreciate the full difference — 
the reputation gets the benefit of the doubt. The reputation, 
and the price of the records in consequence, is often due, how- 
ever, to rivalry between impresarios, rather than to extra- 
ordinary merit of the vocalists. But the public pay for it, 
and count the values satisfactory, because the consciousness 
of rubbing off glory from reputation is quite a tangible com- 
modity of commerce. . , . 



We all know that the "buying habits" of the consumer 

have changed within a generation and that they are changing 

constantly. But the extent of their changes we 
Trying to i t i 

Change g^asp only dmily. 

Bvying We all know, for instance, that the "ready-made" 
idea no longer needs to defend itself in the shoe busi- 
ness. But is the same thing true of the clothing business — 
either for men or women? There is a sharp struggle on in the 
sale of men's clothing. Attempts are being made to change 
men's habits of buying these lines. But is the tailor as help- 
less as the shoemaker was in his dav, and has the consumer 



ADVERTISING AND THE CONSUMER 103 

nothing in his make-up to which the tailor can appeal, or with 
which he himself can oppose the seductions of the clothing manu- 
facturer? 

Some significant features of this struggle over the consumer's 
methods of buying clothes are brought out in the following 
description, by A. Rowden King, of three campaigns conducted 
by makers of trade-marked woolens for the purpose of counter- 
acting ready-made clothing appeals: 

*An official prominent in organized merchant tailoring a year 
or two ago admitted that the ready-made clothing advertisers 
were greatly depleting the merchant-tailoring business — 
threatening its very life, in fact. Another bitterly complained 
that the advertised vogue of trade-marked suits was reducing 
many merchant tailors to mere "pants pressers." 

Only a few saw deep into the interior causes, and put their 
fingers on the weak spot — the fact that the manufacturers 
and importers of woolens had no standing or identity with 
consumers and were not backing up the merchant tailors as the 
ready-made clothing houses were backing up retail clothiers. 
The praises of ready-made clothing have been sung to con- 
sumers to the tune of a million dollars yearly, in various adver- 
tising efforts, for the last six or eight years. It was bound to 
come about that the public be won to the ready-made idea. . . . 

A considerable number of successes in advertising trade- 
marked fabrics for woviens wear have occurred in the past 
few years, and an analogy was bound to occur in the men's 
field. To-day there are three woolen houses . . . adver- 
tising to the consumer. 

The fact that at least one of these advertisers of men's 
woolens has been compelled to increase his output 50 per cent, 
in order to meet the growing demand which has developed 
since his advertising began a season or two ago is evidence 
enough of the possibilities. 

The ready-to-wear tailors seek to condemn the whole propo- 
sition in advance by saying: "Well, it is difficult enough 
for the average man to find a fabric with design and texture 
to suit him, let alone concerning himself with what mill made 
it." But inwardly, without a doubt, these same tailors see 

*Printers Ink, October 6, 1910, p. 35. 



104 ADVERTISING AS A BUSINESS FORCE 

iu this new advertising a serious competitor for tlie great volume 
of clothing sales. 

The three pioneers in this field to-day are J. R. Keim & Co., 
Philadelphia, making Shackamaxon Guaranteed Fabrics; 
S. Stein & Co., New York, selling Stein Woolens; and W. P. 
Willis & Co., New York, importing Willis Woolens. These 
are all old-established houses doing their first consumer adver- 
tising. In addition, there are rumors of other highly reputable 
houses, one of which has been in the business without using 
advertising for upward of forty years, turning to this method 
of marketing their goods. 

The 50 per cent, increase referred to above was in the case 

of Shackamaxon. J. R. Keim & Co. make their own 

The His- woolens at their own mills, which are among the 

Shacka- ^^^''gGst. Their selling proposition is to-day still 

maxon another case of " Our-trade- mark-stamped -on -the - 
selvage- guarantees -you. ' ' 

The "Shackamaxon" advertising is now" in its second 
season. The selling idea back of it is unique and comprehen- 
sive. The purpose is to make it possible for the merchant 
tailor to absolutely guarantee the garments w^hich he puts 
out. When his garments are made of Shackamaxon, the 
latter is guaranteed to give absolute satisfaction as long 
as it lasts. This is the Keim & Co. guarantee: "If any suit 
made of Shackamaxon fabric shrinks or fades, or if any fault 
develops in the fabric — no matter how long you have worn it — 
we will pay for another suit." Then, to this guarantee as to 
the goods, the tailor himself adds his personal guarantee con- 
cerning the fit and workmanship. 

Shackamaxon is handled exclusively by merchant tailors. 
This makes it possible to effect much co-operation with the 
latter. Booklets, follow-up letters, electros for local news- 
paper advertising, window cards, and many other helps are 
freely given to every tailor who handles these fabrics. 

The campaigns are also intended to overcome the idea which 
prevails in the minds of the patrons of many merchant tailors, 
that imported goods are superior to goods of American manufac- 
ture. Considerable argument is made of the fact that the 
Shackamaxon method is an economical one, being unique in 
that it necessitates no middlemen and middlemen's expenses 
between mill and tailor. Emphasis is put upon the methods 
and care of manufacture and upon the great multiplicity of 



ADVERTISING AND THE CONSUMER 105 

patterns, it being claimed that more than 4,000 styles of 
worsteds, cheviots, and serges, in every kind of coloring and de- 
sign, are made every year. 

The F. Wallis Armstrong Company, Philadelphia, which is 
to the agency handling the Shackamaxon advertising, has gone 
particular pains to show up the goods in the illustrations used. 
Both the ads and the booklets carry remarkably good repro- 
ductions of the woolens, thus giving a very definite idea of how 
the latter really look. The cover of the fall and winter booklet, 
which is supplied to the tailors with their imprints, is especially 
good in this respect. 

The trade is being reached by all the important tailor pub- 
lications, such as the Sartorial Art Journal, the American 
Gentleman, and Admticed Fashions. The consumer is being 
reached through a list of publications which covers most of the 
leading magazines with national circulation. Tlie watchword 
of the Shackamaxon campaign against the ready-made manufac- 
turers is: "A suit intended to fit you should be cut to your 
individual measurements and fitted to you in the making." 

The Stein Woolens proposition is of about the same age 

as the Shackamaxon proposition from an advertising 

^Wooim' Standpoint. The firm of S. Stein & Co. is one of the 

Campaign oldest in the business, being established in 1864, and 

being well known to the trade and to a host of 

consumers. 

The Stein plan calls for even more co-operation with the 
tailors, perhaps, than the Shackamaxon plan. A complete 
department has been organized under the direction of Victor 
Leonard, the advertising manager (formerly with Kenyon 
& Co.), to promulgate plans to aid the merchant tailors who use 
Stein Woolens to do a larger business. 

These selling plans are cut to the tailor's business measure 
by Mr. Leonard quite the same as the tailor, in turn, cuts Stein 
Woolens to his patron's measure. "It is a very different propo- 
sition as a little reflection must show," explains Mr. Leonard, 
" to work out a retail selling plan for a tailor who makes suits 
which sell at $25 to $35 and for another tailor who makes suits 
for $50 and up." Plans are suggested for window display, for 
local advertising, and for follow-ups through the mails, etc. 
Tailors are provided with folders of original design, booklets, 
and letters. 

The Stein Woolens selling plan makes it possible for a tailor 



106 ADVERTISING AS A BUSINESS FORCE 

to be entirely exclusive. Not more than one tailor in a place 
is sold, unless his locality is large enough to warrant it without 
question. And even then not more than one or two suit lengths 
of fabric are sent to each locality. 

The motif of the Stein advertising is summed up in the 
following argument: "The same instinct that causes you to 
prefer an original painting to a lithographed reproduction also 
causes you to prefer merchant-tailor clothes. . . ." 

The firm of W. P. Willis & Co., New York, which completes 

the present triumvirate of men's woolen advertisers, has also 

been in the business for a long time. Feeling the 

iww ^J^^oads of the ready-to-wear clothiers, it is now test- 

& Co^ ^^S its advertising wings for the first time. It was 
established forty-two years ago. It imports high- 
grade fabrics for distribution among the high-grade merchant 
tailors in this country. For this reason the Willis advertising 
is necessarily different from the Shackamaxon and Stein 
advertising, which is in the interests of the products. 

An official of the firm explains the Willis viewpoint as follows : 
"The man who pays more than $50 for a suit of clothes or an 
overcoat is entitled to an imported fabric. The highest grade 
custom tailors, who never command less than this price for any 
garment, have always made it their practice to submit to their 
clients only cloths that come from Europe. There are many 
custom tailors, however, who, because of local conditions, find 
it impossible to confine their business exclusively to the making 
of garments of the highest grade. It is to assist them, as much 
as possible, that we have dwelt entirely upon that branch of 
their business in our advertising. We believe that by identi- 
fying our imported merchandise with advertising, we will give 
to the merchant tailors of the country a new argument and 
an active selling force in their business." 

As a means of identification, Willis & Co. stamp every yard 
of their importations with their trade-mark, and all the advertis- 
ing and literature emphasize the fact that this mark is only 
to be found on imported goods. At the same time that the 
Willis advertising will materially help the tailor who charges 
$50 and upward, it will also help all custom tailors, even those 
who make $25, $30, and $35 garments, inasmuch as it booms 
the custom business generally like the Shackamaxon and 
Stein advertising. . . . 

This little trio of woolen advertisers is bound, in the near 



ADVERTISING AND THE CONSUMER 107 

future, to be augmented by others, for there is a large unex- 
ploited field of argument in individual service and sponsored 
fabrics. We shall soon see a competitive advertising struggle 
between these two distinct divisions of tailoring. All of which 
is as it ought to be, for ready-made clothing has had too easy 
a path to success. 

To this list of three woolen manufacturers appealing to the 
consumer to change back again to the clothes-buying methods 
of twenty years ago others have since been added. Notable 
among these is the American Woolen Company. 

These cases, in turn, have been accompanied by a third type 
of appeal to the wearer of men's clothing. This appeal comes 
from the manufacturing tailor who takes individual measure- 
ments through local agents and then makes the clothes under 
factory conditions in a central plant. He is thus able to 
perform the merchant tailor's service, while he secures most of 
the clothing manufacturer's savings in production cost. 

The multiplying of advertising attacks produces a chain of 

troubles, the chief among which are distributive. If an adver- 

The Inter- ^^^^^ '^^ ^^ fortunate as to occupy a field in which he has 

ference of a maintainable monopoly, he can feel reasonably sure 

Attadcs^^ that his results will at least roughly approximate a 
vntk Each definite relation to the skill with which his cam- 
paign has been planned and executed. Otherwise, 
after his skill and ingenuity have done their best his results 
will depend very largely on what his competitors may do. 
And for this there is no visible cure in any appeal to the con- 
sumer. This is a problem quite as much in the province 
of the sales manager as of the head of the advertising depart- 
ment. It brings us back to our original theme — the inter- 
relation of advertising and selling activities. 
Is There a H. M. Horr, Advertising Manager of the Oakland 

Cure for Chemical Company (Dioxygen), New York, discusses 
Subsiuutwn? ^j^jg problem, and suggests a possible remedy under 
the caption, "Is There a Cure for Substitution?" 



108 ADVERTISING AS A BUSINESS FORCE 

*From the point of view of the advertiser, substitution in- 
cludes any and every method of diverting demand created for 
the product advertised. 

The dealer, on the contrary, very often takes a decidedly 
different attitude. He says that substitution means substitut- 
ing one article for another without the knoivledge or consent oj 
the customer. He classes all other attempts to divert demand 
as salesmanship. 

If the dealer is right in his definition, then few dealers make 
a practice of substitution; if the advertiser is right in his defini- 
tion, then substitution is one of the worst obstacles confronting 
the present-day advertiser. Let the dealer's definition stand 
and still the advertiser must contend against the widespread 
attempt on the part of the dealer to divert demand through 
what he calls "salesmanship." 

How is the advertiser going to successfully meet this situa- 
tion.^ That it is a question of very great importance is evi- 
denced by the amount of space now being devoted b}^ many 
advertisers to anti-substitution or "anti-dealers-salesmanship" 
copy. 

In the drug field alone we have Horlick's Malted Milk, with 
their "the only original — the only genuine" copy; Vaseline, 
with their copy aimed at ordinary petroleum jellies of all kinds; 
Dioxygen, with their "greater strength and purity" arguments 
as compared with ordinary "hair-bleaching," peroxide; Pond's 
Extract with their copy educating the public on ''why Pond's 
Extract instead of ordinary witch hazel," etc., etc. 

These advertisers and many others realize that they cannot 
get the full benefits from creative advertising because of the 
activity of the retail dealer in diverting the demand their 
advertising creates. The same situation exists in every line 
of business. Every advertiser, except the strictly mail-order 
advertiser, suffers from trade diverting "salesmanship." 

Advertisers estimate their loss of business from this source 
at anywhere from 10 per cent, to 75 per cent., and the worst 
of it is the dealer believes he is justified in his attitude. 

If any individual advertiser, to protect his business, uses any 
part of his advertising space to warn the public against "sub- 
stitutions," the dealer at once takes offence; he is more aggres- 
sively antagonistic than ever, and the advertiser loses as much 



*Printers Ink, February 16, 1911, p. 22. 



ADVERTISING AND THE CONSUMER 109 

as he gains. Why did the magazines give up their joint "anti- 
substitution" campaign of a few years ago? Simply because 
they got cold feet; they were arousing "too much antagonism" 
in the retail trade. 

The situation grows worse instead of better, and why? 
Simply because under existing conditions the balance of power 
is with the distributor. No one manufacturer is strong enough 
to make a winning fight against the odds he has to face. True, 
many advertisers are successful in spite of existing conditions, 
but how much more successful would these same advertisers 
be, and how many unsuccessful advertisers would become 
successful ones, if this one big obstacle could be entirely re- 
moved? 

Is there any cure ? Suppose fifty national advertisers would 
annually subscribe $5,000 each to a common fund to be devoted 
to educating the public? Suppose this $250,000 appropriation 
should be devoted to advertising the quality, dependability, 
and reliability of all nationally advertised products, without 
mentioning the name of any single product. Suppose, in such 
a campaign, the public be enlightened as to reasons why retail 
dealers prefer to sell unknown, untrade-marked and unadver- 
tised brands. Suppose the public be taught that an established 
name, and a price set by the manufacturer, is the best guarantee 
of quality — of full value. Suppose the public be taught in 
every possible way to believe in advertised products, and in 
the quality necessary to make advertising justifiable. In brief, 
suppose salesmanship be met with salesmanship on a scale that 
will make things more equal. Would a campaign of this kind, 
conducted on a big, frank, open and above-board plan, have its 
effect? 

Wouldn't it even be possible, in an organized effort of this 
kind, to supply a sign or some means of public identification 
to every store whose proprietor would agree to sell what the 
customer asked for 9 A penalty for wilful violation might be 
included as a condition of the agreement and a fund ^tablished 
for the prosecution of all violators. There wouldn't be many 
prosecutions because that kind of publicity would hardly be 
healthy for any store. . . . 



There is plenty of room for difference of opinion as to the 
merits of Mr. Horr's plan to correct the "substitution evil." 



110 ADVERTISING AS A BUSINESS FORCE 

But there can be no avoiding the fact that as appeals to the 
consumer multiply they are apt to damage each other by the 
very success with which they stir up or divert demand. 

CONSUMER CO-OPERATION AS A SOLUTION FOR CONSUMER ILLS 

Among the solutions for some of the more pressing distribu- 
tion problems of the consumer is that worked out in Great 
Britain and on the Continent in the co-operative 
Co-opera- ownership of factories by consumers. Under the 
twnasa caption "Does Consumer Co-operation Threaten?" 
for Corisu- Charles W Hurd, of the Printers' Ink staff, brings out 
mer Ills gome points as to the spread of this line of activity in 
this country as compared with its development in Europe, and 
its effect on the relations between producer and consumer if it 
should become common. Following the portion of the article 
given here there is, in the original, a quotation from the secre- 
tary of the new co-operative organization suggesting its possible 
future plans, and a series of quotations from American manufac- 
turers who do not seem to regard this form of resistance on the 
part of the consumer as a very imminent danger: 

*The first consumer's co-operative factory ever established in 
America was started in New York a few months ago and al- 
ready has four retail outlets. It is a hat factory. One of the 
stores handles men's furnishings as well, including many trade- 
marked articles, and all of the stores will probably develop 
along this line. The co-operative is seeking to organize the 
widely scattered one hundred and fifty or so co-operative retail 
stores in the country into one national organization and pool 
their buying power. 

Modest as this beginning is, it is of vastly more seriousness 
than the sudden and astonishing crop of consumers' buying 
associations and municipal marketing which just now is 
bulking so large in the public eye. This latter is a mushroom 
growth, an impulsive middle-class protest against the high cost 

*Printers Ink, April 25, 1912, p. 80. 



ADVERTISING AND THE CONSUMER 111 

of living, and sooner or later will subside, leaving only a few 
surface memorials to mark its present activity 

Its only real significance is that it marks a profound alteration 
in the popular mind respecting co-operative ventures, corre- 
sponding with the changed industrial conditions and the 
widespread social unrest, and indicates that America, so long 
immune, may now possibly offer a more hospitable soil for the 
growth of the powerful workingmen's co-operative movement 
which has already invaded every other country on the globe 
and is a commercial and industrial phenomenon of the first rank. 

The co-operative factory just established in New York is 
the vanguard of this movement. 

If the co-operatives of this type were merely wholesale and 
retail buying societies, they would deserve only the passing 
interest of the national advertiser, but they are engaged in 
manufacturing as well, and their aim is not merely the moderate 
one of cheapening goods to a few members, but of extending 
the system more and more until there is effected a complete 
industrial and commercial revolution through absolute monopoly. 

This is somewhat of a large undertaking, but it must be con- 
fessed that the co-operatives have made a tolerable showing 
at the start. They are only forty or fifty years old, but they 
are supported by the heads of some 10,000,000 families in all 
countries, which means about 50,000,000 people in all. 

In England, one family in every four is represented in the 
co-operatives. The percentage in Scotland is even higher. 
In these two countries the two co-operatives did a business 
of more than $650,000,000 in 1911 — an increase of more than 
8 per cent, over the previous' year, despite the business depres- 
sion or perhaps because of it. 

The German, Belgian, and Austrian societies are much 
younger, but are already large and are growing at a rate which 
is retarded somewhat, though not checked, by private initiative 
and legislative hostility. The movement is closely allied with 
the labor movement, and outside of England with the revolu- 
tionary movement, which it helps largely to finance. 

So it is evident that the movement holds something more 
for the American manufacturer than merely academic interest, 
even at this time when such consequences as those described 
must be remote in respect to our own land, because the con- 
tinuous and complete extension of the system in this country 
would soon begin to handicap many manufacturers, impair 



112 ADVERTISING AS A BUSINESS FORCE 

the value of their trade-marks and good will, and progressively 
destroy it. 

It would restrict and finally destroy advertising as we know it, 
inasmuch as the advertising of the co-operative is for the most 
part confined to simple announcements, and there is no competi- 
tion within the societies to stimulate its development. . . 

The workingmen's co-operative, the one which is succeeding 
on a large scale to-day, is different from all other kinds. It 
starts with the organization of the market, and works back 
as fast as possible from retail to wholesale and wholesale to 
manufacturing. Its thousands of members are so many 
salesmen to bring other members in. It always knows its 
market, and is always extending it. 

Practically all of the successful co-operatives are founded on 
the English or Rochdale model — that is to say, they are col- 
lectively owned and democratically administered. The mem- 
bers themselves supply the capital in small payments, but 
draw no dividends except as they buy, and then in the shape 
of reduced prices. 

The English and Scottish co-operatives manufacture a great 
many different commodities, from bread and canned food to 
clothing, shoes, and bicycles. The largest bakeries in the 
world under one management are those of the Glasgow co- 
operative. The second largest are those in Vienna belonging 
to an Austrian co-operative. 

Ground is being broken now by a co-operative in Manchester, 
England, for a textile mill which it is claimed will be the largest 
in the world. 

All the goods made in these co-operative factories and mills 
are manufactured and sold, not for private profit, but for the 
benefit of the consumer members. There is no room in their 
plans for private enterprise. If capital is borrowed, as it 
sometimes is, the usual market rate of interest is paid, but no 
private investment in co-operative work is permitted. 

The factory is given a small profit to provide for extensions, 
repairs, depreciation, new machinery, etc., and the retail 
establishments are allowed a small profit for the same reasons. 
The balance of the saving is divided, part among the operatives 
and salespeople, in addition to their wages, part among the 
consumers, and the rest is used for propaganda or advertising 
the system. In addition, there are sick benefits. 

The wages are not high. The highest officer chosen by the 



ADVERTISING AND THE CONSUMER 113 

Scottish co-operatives never received more than the equivalent 
of thirty-seven dollars a week. He held office for thirty years, 
and is now president of the newly organized international 
alliance. 

This outlines the sort of competition the manufacturers of 
the United States may have to face before many years. . . . 

EFFECT OF ADVERTISING ON VALUE OF GOODS 

One other point and we shall be obliged to leave this part 
of our discussion. And this point is chosen not because it is 
intrinsically more important than many others which could 
be mentioned, but because it suggests one of the ways in which 
advertising affects the goods via the consumer, just as we 
already have seen that it affects the consumer direct and the 
selling mechanism via the consumer. 

If the consumer's attitude toward the goods is changed by 
the advertising, obviously the consumer's idea of their value to 
him must be altered, and it may even be possible that the real 
value may be changed as well. H. W. Barnes, Advertising 
Manager of the Russell-Miller Milling Company, of Minneapolis, 
contends that advertising makes goods more valuable because 
of these changes in the consumer's attitude, as well as for other 
reasons. He says: 

*Does the buyer of the advertised article get his money's 
worth-f* I prefer to rephrase the subject and say, "The buyer 
of a wisely advertised article gets more for his money than the 
buyer of an unadvertised article." Whether the latter gets 
his money's worth depends upon what he expects for his money. 
One who is familiar with advertising expects more and is not 
satisfied with the mediocre. 

We are led to buy an effectively advertised article partly 
on account of its wide distribution. You know that once you 
try and like it, you will be able to secure it everywhere. " Univer- 
sal accessibility," then, if you please, is a quality peculiar to 
the advertised article, and this exclusive quality, you must 
admit, adds to its value. Whether the advertising or the 

''Printers" Ink, August 31, 1911, p. 62. 



114 ADVERTISING AS A BUSINESS FORCE 

distribution comes first is immaterial. It is certain that the 
advertising and the wide distribution go together. 

Suppose two brands of soap of equal quality were manufac- 
tured in a certain town and were sold at identically the same 
price. In the beginning one would get just as much for his 
money, whether he bought one brand or the other. One 
manufacturer, by advertising and aggressive selling methods, 
places his goods in practically every drug and grocery store in 
every city and village throughout the country, so the folks 
who had become accustomed to this manufacturer's brand 
were then in a position to secure their favorite soap wherever 
they happened to want it. The added convenience gave 
them more for their money than formerly, or more than in 
buying the unadvertised brand. The increased output enabled 
the manufacturer to cut down his cost per cake sufficiently 
to cover the advertising and still receive the same returns 
from his investment, and so the purchaser received more for 
his money in added convenience. 

Granting, even, that the advertising had to be charged up to 
the customer and that each bar actually cost half a cent more 
than the unadvertised brand, even then it was certainly worth 
more than the extra cost for the purchaser to be able to 
always buy the article to which he was accustomed wherever he 
wanted it. 

The Illinois farmer, after moving to Colorado, would scarcely 
know how to do his work unless he could get the same kind of 
implements and tools that he had been using. The first item 
he notices in his new local paper is the advertisement telling 
about his favorite mowing machine or plow. He is not only 
able to get exactly what he wants, but he is able to buy it 
cheaper than he could a generation ago, before advertising had 
accomplished the universal distribution of this particular class 
of goods. He gets more, perhaps, for his money in buying this 
kind of goods than in buying any other. There is no question 
that in buying some advertised articles you get more for your 
money than in buying some other similar article equally well 
advertised. The element of the value of universal accessibility, 
however, exists in either case. 

When an advertised article is used with satisfaction in 
Chicago, it is worth a lot to know that when one gets to Minne- 
apolis he can keep right on using the same identical article. 
It is worth more than the advertising cost not to be compelled 



ADVERTISING AND THE CONSUMER 115 

to experiment with unfamiliar brands until he finds one that 
exactly fills his requirements. 

It is worth more than the advertising cost to know when one 
buys a camera that he can always get the proper supplies for 
it, no matter where he is, camping or hunting. He gets more 
for his money than he could by buying the unadvertised article 
and suffering the inconvenience of not being able to secure 
supplies when they are most needed. 

Articles that are on sale in a large number of stores are 
bought simultaneously by thousands of persons. In effect, 
this amounts to co-operative buying, and it is generally recog- 
nized that goods can be bought more cheaply in large quantities 
than in small quantities. In other words, each one who buys 
the article in question gets more for his money than he can get 
otherwise, and he can secure a favorite article whenever and 
wherever he happens to want it, makes the advertised, univer- 
sally accessible article more valuable, a "better buy." 

The properly advertised article possesses more value than 
the same article unadvertised or poorly advertised. That is, 
the advertising invests in the article qualities which add to 
the satisfaction and the pleasure and pride of the buyer. . . . 

When I think of watches, a particular one stands out far 
above all the others. Its manufacturers have succeeded in 
building up around it an atmosphere of exclusiveness, superi- 
ority and other qualities on account of which I could not be 
entirely satisfied with any other kind of timepiece. If I were 
to buy one I should feel that I had bought something, a lot of 
things, that other watches do not possess — that I had got 
more for my money than I could by buying a watch whose 
characteristics were not well known to me. 

I might recount numberless illustrations of how manufac- 
turers of breakfast foods, fountain pens, mattresses, flour, and 
hundreds of other commodities have created in the minds of 
people ideals which make it possible for the purchasers of 
these articles to actually get more value out of them. These 
products are worth more than unadvertised products because 
the advertising has invested them with a peculiar value. 

Advertising clothes the article with its aesthetic qualities 
so effectually that the actual wood, iron, gold, wool, cotton, or 
other material is lost sight of in contemplation of the "con- 
dition" that may be brought about through the possession of 
the commodity. And on this account also the advertised 



116 ADVERTISING AS A BUSINESS FORCE 

article is a "better buy" than the unadvertised one. The one 
may fill an important place in your plan of things, may contrib- 
ute its share in your happiness and profit; the other is simply 
so much inanimate material. 

The merchant who buys a cash register does not buy a 
drawer in which to put his cash, a lot of buttons to push, a 
crank to turn, and a number of various size cog-wheels. He is 
led rather to see in his mind's eye the condition of order, exact- 
ness, knowledge of his business, and increased profits which will 
come from the intelligent use of the machine. 

And so if it's true, and I think you must agree that it is, 
that wise and honest advertising makes an article universally 
accessible, invests it with distinctive and exclusive qualities, 
and enables the buyer to choose on account of the desired 
condition the article will make jx)ssible, then it is pretty safe 
to say that advertising is not advertising unless it explains and 
teaches — unless it conveys ideas and ideals. Real advertising 
adds to the economic and social welfare of the commonwealth, 
and so of necessity the advertised article has added value 
over the unadvertised. 



These few points, out of many which could be considered, 
have been presented in order to help us appreciate how much 
more than a mere market for goods is the modern consumer. 
As an object of advertising attack he is a complicated and 
variable composite under pressure from within and without. 
And there is scarcely an emotional motive, or an economic 
impulse with any influence on human action, which can be 
ignored with safety by the advertiser who wants to catch and 
hold him. 

Nor is the consumer inert. He has powers of resistance, and 
he is learning how to use them. Even leaving the supremely 
important problems of consumer psychology out of consider- 
ation, he has means at hand for taking advantage of any 
weakness in advertising plans. The consumer problems of 
the modern advertiser are not merely to discover buyers 
of goods and to exploit them. They are as intricate as 
war plans. 



ADVERTISING AND THE CONSUMER 117 

REVIEW QUESTIONS — CHAPTER V 

1. How does modern advertising affect the consumer's 
ability to choose what he will buy? 

2. Do you agree with Professor Carver's suggestion of a 
parallel between methods of warfare and methods of advertising 
attack and resistance? 

3. What were the main features of the first campaign 
for advertising the Eleventh Edition of the Encyclopaedia 
Britamiica? 

4. How can "standards of living" be affected by adver- 
tising? 

5. What features in the ready-made clothing business differ 
from the problems involved in advertising factory-made shoes? 

6. How does Mr. Horr plan to meet the problems of substi- 
tution? What are the main defects in his plan? 

7. How does co-operative ownership of factories by con- 
sumers affect the advertising problems of the industries in 
which these concerns are found? 

PROBLEM QUESTIONS — CHAPTER V 

1. Make a list of consumer defences in addition to those 
mentioned, and show how advertising plans are modified by 
them. 

2. Discuss the effect of price habits and buying customs 
on the consumer's freedom of choice. 

3. If two advertisers of shaving soap advertised equally 
widely and with approximately equal effectiveness, would the 
results secured by each and the effects on their campaign 
plans be the same as if there were five at work with the same 
energy and effectiveness in the same market? Would the 
final maximum limit of possible sales of shaving soap in the 
market be ascertainable? 

4. Could the Encyclopaedia Britannica methods of attack 
have been equally well employed in selling the Ninth Edition 



118 ADVERTISING AS A BUSINESS FORCE 

ill the early nineties? Could it be employed again in the sale 
of the present edition? How does the campaign now in 
progress for the same work differ from the former one? 

5. If 10 per cent, of the boot and shoe producing capacity 
of the country should come under control of consumers' co-oper- 
ative societies, would it affect the advertising methods of 
the shoe business? If the percentage should increase to 35, how 
would it be? What if it were 50 or 60? 



CHAPTER VI 

THE "regular" retailer 

THE multiplying of the appeals to the consumer has 
completely changed the retailer's position as a part of 
the distribution system. Formerly, the selling of 
the goods was his main service, and the selling of the goods 
involved influencing the consumer as to the nature of his wants, 
bargaining with him over the price, and then convincing him 
that he was satisfied with his purchase. 

Under present conditions, however, largely as a result of 
advertising, the nature of the consumer's wants is, at least 
partially, predetermined. The price is more or less completely 
set and satisfaction is guaranteed. And all of these services 
are performed not by the dealer but by the producer of the 
goods, or whoever stands sponsor for them in the advertising. 
The retailer's service in the case of nationally advertised goods 
thus becomes primarily a delivery service and not a selling 
service. 

For some time after this change in the retailer's position 
became conspicuous, nearly everybody in the selling system, 
including the retailer, believed that the retailer was to a large 
extent helpless and that he had become a mere order-taker. 
Recently, however, the retail dealer has come to feel something 
of the real strength of his position. He now sees that while 
he can be forced by the national advertiser to a certain extent, 
he has, after all, a very valuable advantage in his personal 
contact with the consumer. He has come to something like 
a real appreciation of the fact that it is through him alone 
that most of the psychological reactions produced by advertising 

119 



120 ADVERTISING AS A BUSINESS FORCE 

can be converted into real sales. Within the past three years 
there has been a very marked increase in the recognition given 
to the retailer in national advertising plans, and it is coming 
to be accepted as a fact worth consideration that the plans 
which have met with greatest success are those which have 
secured the heartiest and most sincere co-operation of the 
retail dealer. 

Retail distribution has been radically changed by modern 
conditions of living. Rapid transit, the telephone, and other 
modern inventions have removed many of the old limits on 
a retail store's radius of sale. Some retailers have been able 
to take advantage of the new conditions. And as their sales 
increased in volume their purchases increased correspondingly. 
They no longer need the services of a wholesaler for most of 
their purchases, since they can buy on as large a scale as the 
wholesaler himself. They now go to the producer direct. 
On the other hand, many retailers have not been able to expand 
in this way. And so we have, side by side, two types of 
retailer: (1) The "regular" retailer, still buying through 
the wholesaler, and (2) The new type of retailer buying with 
little or no wholesaler help. We shall divide our discussion of 
the retailer into two parts to correspond with these two types 
of retailer. First we shall consider a collection of cases showing 
the place of the "regular" retailer in national advertising and 
distribution campaigns, and the methods employed in getting 
his co-operation in selling plans. After that (Chapter VII) 
we shall consider the advertising aspects of some of the new 
forms of retailing, particularly the department store, the chain 
store, the mail-order house and one or two forms of co-operative 
store which have become important. 

There are many ardent advocates of the importance of the 
"regular" type of retailer as a factor in distribution. Among 
them is George L. Louis, an advertising agent in Chicago. 
Mr. Louis, in a recent article, explained some features of his 
ideas by telling how six maufacturers in unspecified lines under- 



THE "REGULAR" RETAILER 121 

took to link up their national advertising campaigns with the 
work of small retailers, Mr. Louis, it will be seen, confines 
most of his attention to the methods of reaching small stores 
in towns of less than 50,000 inhabitants. This market, as he 
clearly shows, is extremely important. There are many, 
however, who believe that this part of the consuming population 
of the country can be reached best by approaching it via the 
big cities with their equipment of large stores. This type of 
retailing we shall examine in greater length in the following 
chapter. 

Portions of Mr. Louis's article are as follows: 

*Restandardization in distribution — in selling and buying, 
in the passage of merchandise from manufacturer to retailer, 
from retailer to consumer — has begun. With it has come, 
too, decided reductions in selling costs and a proportion- 
ate lowering of the price paid for his purchases by the con- 
sumer. . . . 

It has been my privilege to follow closely and intimately the 
development of the selling plans of six manufacturers engaged 
in distinct lines of business and each among the largest and 
most successful of his kind. Together these six establishments 
present in fairly complete fashion the vital phases of what I 
have called the re-standardization of merchandising. 

No one of them, however, has applied its principles to every 
department of his distribution program. For the purposes 
of this article, therefore, the individual features which these 
six concerns have developed most fully have been assembled 
and dovetailed into a composite whole. And because this 
composite plan can be applied to almost any merchandising 
business it will be set forth here as a complete unit. The details 
have been tried out and proved by manufacturers of men's 
clothing, women's apparel, hardware specialties, toilet and 
drug preparations and foodstuffs who have built up tremendous 
and profitable businesses by these methods. 

Four of these six manufacturers formerly conducted their 
marketing in the conventional way. There has, therefore, 

*System, September, 1912, p. 272. This article is the sixth in a series by Mr. 
Louis appearing in System for November and December, 1911, and February, 
April, and June, 1912. 



122 ADVERTISING AS A BUSINESS FORCE 

been ample opportunity to contrast methods, to gather evidence 
and to deduce conclusions. The other two firms are of recent 
origin; but their adoption of the new methods from the begin- 
ning has enabled them to make records of consistent advances 
unusual in the case of newcomers in their fields. 

All of these manufacturers distribute through retailers. The 
retailer, therefore, is the most important cog in the machinery 
of their distribution. He is recognized as such and is as closely 
studied and analyzed as the processes of manufacturing them- 
selves. The dealer is acknowledged to be a principal in the 
marketing of the product, and the alliance with him is a real 
partnership. 

These manufacturers approach the retailer directly through 
three mediums: the salesman, the letter, and the trade journal. 
Since each of these has its distinct field and function in selling, 
they are used together. The salesman, letter and trade journal, 
employed at the proper time and in the proper way, will gain 
the attention of the most indifferent dealer. 

The letter precedes the salesman. All of the preliminary 
work, the introduction of the manufacturer to the retailer, is 
accomplished through the mail. Ordinarily, unless the sales- 
man can conveniently and inexpensively make new towns, he is 
not permitted to waste time and money in visiting prospects. 
Until the letter establishes the dealer's confidence, the salesman 
avoids him. ... 

' What a properly balanced selling plan means to a business 

can be seen after study and analysis of the experience of 

these manufacturers. Follow-up letters can be made 

A Balanced ^^ eliminate much of the uncertainty involved in 

Plan seeking new accounts. They lessen selling expense. 
They are the only practicable means of getting a 
huge volume of small orders on which the profit is larger 
than the average. The trade journal is used as a co- 
worker with the letter. This space is bought and used for 
a definite purpose and must fulfil that purpose. The copy 
is changed in every issue and is keyed by offers of booklets 
on some appropriate retail merchandising subject like selling 
plans, special feature sales, and so on. Each paper must 
produce inquiries to justify the investment. 

All of these manufacturers are radical in their attitude 
toward their two possible markets — the large city and the 
small town. The cities are seemingly neglected; all their 



THE "REGULAR" RETAILER 123 

energy and effort are concentrated on the small towns. Every 
town, village, and hamlet where there is one or more stores 
is "on the sales map." The so-called "little fellows," fre- 
quently ignored on the ground that their buying power is too 
small, cater to at least 40,000,000 people. 

Here are some statistics which have influenced these manu- 
facturers to consider the small town as their most important 
market. According to the last census, there are only 2,405 
cities in the United States which have populations of 2,500 
or more. Including the other centres which have a million 
or more people within their borders, the total urban population 
is only 42,623,883. In the territory classified as rural, on the 
other hand, there are 49,348,883 persons. Of these 8,119,528 
live in 11,784 incorporated towns of less than 2,500 population, 
but the majority of the remaining 41,229,355 buy the bulk 
of their necessities in these smaller towns. . . . 

To begin with the small towns where an equal volume of 

business and greater profits can be secured, and work from this 

The Small ^^^^ ^^ ^^^ ^^^^ trade, is the quicker, easier, safer 

Market journey for the young manufacturing house to make. 

Is the For the concern already established in the larger 
Short Ctd trade centres the neglected "provinces" offers an 
attractive field. To work it effectively, however, it must be 
treated seriously and not as a mere adjunct to the city terri- 
tory. 

Consumers in smaller cities and towns buy quality goods — 
all sorts of luxuries and conveniences for their homes, delicacies 
for their tables, devices that minister to their amusement. 
Cheap buying is not characteristic, as is commonly assumed. 
Per capita they buy much larger quantities of staple com- 
modities like fiour, foodstuffs in general, stoves, refrigerators, 
and so on. A large percentage of city folk live in apartments 
which are rented ready for occupancy, painted, decorated and 
even partly furnished. A goodly proportion of them eat 
in restaurants, where they cannot specify the salt, flour, sugar, 
canned goods, and other foods which they consume and where 
silver, china, and table-ware are not greatly considered. 

Results which the six manufacturers are showing prove that 
sales are increased in volume, profits are larger, and all condi- 
tions are better if but one dealer is sold in each locality. With 
the exception of one house of the six figuring in this' article, 
selling through exclusive dealers is the fixed rule. The one 



124 ADVERTISING AS A BUSINESS FORCE 

exception is a manufacturer of toilet preparations, which are 
purchased in such limited quantities by each drug store that 
sales through all stores are necessary. 

But in all lines of men's, women's, and children's apparel, 
furniture, and so on, the volume of business and net profit can 
usually be increased and the selling cost decreased by selling 
exclusively through one retailer. 

Regardless of how extensive and how powerful a national 
campaign may be, if the dealer is not back of the goods, only 
the minimum of sales will result. The "created demand" 
impetus is not sufficient to overcome an indifferent retailer. 
The final force that completes the sale must be as active and 
as strong as the first stimulus that arouses the consumer's 
desire. It is acknowledged that the dealer controls his local 
situation; that the consumer waits on him for his final selling 
argument. These manufacturers have been taught by experi- 
ence that when two or more merchants in a given locality sell 
the same branded goods, they will not lend their names and 
energies to promote such goods to the fullest possible extent. 
For the fruits of their efforts can be shared by their competitors. 
The merchant knows that he jeopardizes his own welfare and 
profits if he advertises goods that his neighboring rival also sells. 

When a merchant has the sole selling privileges and is free 
to build up his trade with this as an asset, here is an example of 
what can happen : 

In an Illinois town of 20,000, one of the six concerns originally 
sold to five stores. The sales averaged about $1,200 annu- 

What ^^^y* With a change in policy the goods were re- 
Happened stricted to one store. Immediately that dealer began 
in a Small to advertise the line in the local newspapers and by 

IlKnois window displays. The first year's sales ran over 

fown $3 000; they have increased since. 

These concerns nourish the power and the personality of 
their retailers. They have found that the more highly devel- 
oped the retailer is, the more valuable he is as a selling outlet — 
for then he can and will sell more goods. 

Instead of submerging the identity and individuality of the 
retailer, his initiative and independent activities are encouraged. 
The bond of good-will which these manufacturers establish 
with the retailer brings a harmony which eliminates the "dealer 
problems" and wastes in marketing. Selling to the merchant 
is reduced to its simplest, quickest form. It becomes only an 



THE "REGULAR" RETAILER 125 

exposition of goods and prices. The dealer drops his customary, 
defensive attitude in buying. He is free to consider the mer- 
chandise and its seUing value without fear that the salesman 
will attempt to "put one over on him." 

The caution and consequent delay in buying that char- 
acterizes the average retailer have been further removed by 
the "small-order" policy that some of the manufacturers 
pursue. They make it a rule to sell the merchant as small an 
order as is consistent with his selling possibilities. There is 
no stuffing or forcing of sales. The result is that the salesman 
makes a greater number of individual sales every week than 
he could possibly land if he attempted to sell larger orders. 
He "cleans up" with each customer in half the usual time and 
covers twice the ground the average road man can. Selling 
expense is reduced materially since all the "re-orders" come 
in by mail. 

The quick turn-over of a small stock leaves an unfailing 
impression upon the merchant. He re-orders by mail before 
his stock is too much depleted, while continual reminders 
from the manufacturer to keep his stock up does not let him 
lose sight of this point. Substitution has been practically 
eliminated. The good will of the dealers makes competition 
helpless. 

The cultivation by these manufacturers of a broad, intelligent 
relation with the retailer, solves many of the wasteful riddles 
of distribution. The plan promotes a frank, friendly, sincere 
co-operation with the merchant. The retailer is recognized 
as too important to be ignored, as unproductive when driven, 
as uncertain when cajoled and bribed. All of these manufac- 
turers testify to this fact; as you treat the merchant just so 
he will respond. 

In the handling of their advertising, these manufacturers 

have worked out a common policy which arouses none of the 

antagonism which many national campaigns have 

Dealer stirred among retailers, but actually secures co- 
Avoided^ operation from the dealer to its ends and purposes. 

These manufacturers keep rigidly away from em- 
ployment of their national advertising as a device to force the 
sales to dealers. Instead he is shown that the campaign is an 
auxiliary power which he can use to good advantage. He is not 
awed and frightened into buying by circulars which captionize 
the alleged selling arguments: "We are reaching and influenc- 



126 ADVERTISING AS A BUSINESS FORCE 

ing 5,000,000 people and are spending $50,000 for you. Hurry, 
stock up!" Instead, quietly, calmly, but forcibly they say: 
"This publicity will surely influence the men and women of 
your locality. It will arouse their desire for our goods. You 
and you alone can change this desire into actual profitable 
sales." 

Nothing is left to the dealer, however, which the producers 
themselves can shoulder. The "follow-up" campaign is 
planned as carefully as the display advertising. The interval 
required for putting an inquiring prospect in touch wuth a 
retailer is reduced to as short a period as the mails make possible. 
Inquiries are answered the same day they are received. 

How does this affect the dealer? 

In a previous article, the development of the retailer from 
the storekeeper to merchant was traced, and the process by 
which in too many cases he had been forced back to storekeeper 
again. In contrast, the retailers of these six manufacturers 
have become real merchants once more. They are forcing 
the issue in selling. They are not buying more or less blindly. 
Instead each works out and shapes a merchandising program 
of his own. 

The broad policies, the friendly attitude, and the sincere 
efforts of the producing concerns have entirely removed one 
source of worry, the attempt of the manufacturer to encroach 
upon their domain. This has occupied so much of the dealer's 
attention and consumed so much of his energy that looking 
after his business has often become an incidental matter. 

From each of these six "new school" manufacturers I secured 
the names of twenty-five retailers on their books. These one 
hundred and fifty merchants were all customers of the various 
manufacturers and were within a circuit which I had mapped 
out for the study of the problems in distribution dealt with in 
these articles. 

The educational partnership-efforts of the producers showed 
results in a very decided way. With but a few" exceptions the 
retailers were found to be doing the largest business in their 
respective territories, while their selling expenses were exceed- 
ingly moderate. Free from "manufacturer problems" and 
able to concentrate all of their activities upon selling they had 
developed their trade remarkably. 

Without exception, they were "cashing-in" on the national 
campaigns of the producers. They knew how to do this with- 



THE "REGULAR" RETAILER 127 

out losing their identity. They connected their stores with the 

advertised goods by endorsing the advertiser's claims for his 

wares. They focussed their "desire" which the man- 

Cashing-in ufacturer created, and at the same time placed them- 

n'] I selves above the merchandise. They were reinforcing 
Campaign the producers' selling efforts by their own individual 
energies. Even in the preparation of their advertis- 
ing they did not use the manufacturer's words; they rephrased 
his arguments in their own distinctive fashion. 

And the next and final factor in distribution, the consumer, 
has been educated by these saner retail methods into better 
buying. He has been weaned away from the bargain idea, 
from the shopping habits which the retailer himself is usually 
responsible for. 

When the merchant co-operates with the manufacturer, 
intelligently and willingly, two powerful forces are combined 
which insure the maximum selling at a minimum expenditure 
of energy and money. Demand and supply in themselves 
will not regulate buying and selling satisfactorily. The eco- 
nomical distribution of goods from manufacturer to consumer, 
by way of the retailer, must be based upon a systematic, direct, 
intelligent plan which invests each factor with a responsibility 
and brings tliem all into co-operation to that end. 

THE RELATIONS OF THE MANUFACTURER WITH THE RETAILER 

Among the most conspicuous of the advertising relations 
between the "regular" retailer and the other parts of the sell- 
ing system is the group of methods for inducing re- 
ffeZp" 03 tailers to push advertisers' goods known under the 
a Part of general term of "dealer help." Roughly, this term is 
Plans"^ used to cover any effort made by the national adver- 
tiser, whether he be a manufacturer or a jobber, 
to help the dealer convert into sales the consumer-interest 
created by the national advertising campaign. 

"Dealer help" takes widely different forms, but through 
them all runs the attempt to have the national advertiser's 
interests represented when the actual sales transaction induced 
by the advertising takes place. 

The "dealer help" relations between the national advertiser 



128 ADVERTISING AS A BUSINESS FORCE 

and the "regular" retailer can be no better illustrated than 
they are in the case of the Procter & Gamble Company in its 
recent attempt to launch a new cooking fat under the name 
of Crisco. The story is told as follows by R. Bigelow Lockwood : 

*The Story of Crisco, the new cooking fat that has made 

butter "infamous," has as its dominating character a certain 

individual about whom very little is known outside 

o/crisco ^^ those who have made his study their specialty; the 

retail grocer. 

In the scramble to "reach the consumer," manufacturers 
of products selling through grocers have been prone to forget 
that the grocer is the mouthpiece between them and the person 
who uses the goods. The fact remains that grocers and their 
solicitors know their customers so well that it is safe to say that 
the ordinary retail grocer can sell seven out of ten customers 
any brand of food he wants to. Granted that a consumer, 
influenced by an advertisement in the general magazines, asks 
for a certain product, the grocer is able in most cases to sub- 
stitute something else if he wants to, for the simple reason 
that the customer knows him and trusts his judgment. 

To illustrate just one case where this relation between grocer 
and customer offsets the influence of advertising. The Acme 
Tea Company of Philadelphia, a chain of nearly 250 stores, 
sells four times as much Acme Baking Powder as it does Royal. 
Next to nothing has been spent on advertising the former to 
consumers, and probably $500,000 per annum has been spent 
on the latter. 

When a manufacturer reaches grocers he reaches their cus- 
tomers. Creating a demand on the part of the consumer is 
important, but beware lest the tendency be to overestimate 
the consumer end of securing active co-operation with the 
dealer. Work on the dealer is the missing link in modern 
selling methods; or if not actually missing it is often the weakest 
link in the chain. Every manufacturer has to cross a certain 
bridge — and that bridge is the retailer, provided his product 
is one which must be sold through this channel. 

The manufacturers selling a product through the medium 
of the retail grocer must convey tivo messages; one to the 
consumer about Quality, and an entirely different one to the 

*Advertising and Selling, May 1912, p. 65. 



THE "REGULAR" RETAILER 129 

grocer about Profit. If a consumer, and we are speaking now 
of the housewife, could remember a manufacturer's message 
and repeat it verbatim it would hold not the slightest particle 
of interest for the grocer. The grocer must be sent a message 
which cannot be entrusted to the consumer — a message 
regarding Profits which will make him push the manufacturer's 
goods. The consumer cannot be expected to convey this 
message; there is no reason why she should, and it would not 
be the best policy to let her know it anyway. 

The logical campaign is to reach both grocers and consumers — 
but reach the grocers first. Thus when launching a new 
grocery product the dealer campaign should be started at 
least thirty days before general advertising begins. 

Now perhaps you are thinking what all this has to do with 
Crisco. The answer is just this: Before we take up the 
actual story of the product it is necessary to thoroughly under- 
stand the actual field conditions and the relations which exist 
between the three corners of the triangle — manufacturer, grocer, 
and consumer. Once this relationship is established we shall 
be able to follow clearly each move in the Crisco Campaign. 

In the way of enlightenment regarding the character and 
importance of the retail grocer I am indebted to the C. M. 
Wessels Co. of Philadelphia and to Mr. Paul Findlay, the 
New York manager of the company, and a recognized authority 
on grocery-store management and other matters of general 
and specific detail about the retail grocery business. 

Should there by chance be an isolated reader who does not 
know what Crisco is then let me advise him to ask his wife. 
For the benefit of those not so fortunate as to possess wives, 
Crisco is a wholesome cooking fat made entirely from edible 
vegetable oils by a secret process. It is also a Procter & 
Gamble product. 

When Procter & Gamble fired their opening gun at the 
retail grocers and dealers the following letter came, in the 
usual course of procedure, to the hands of a Mr. Hjermstad, 
proprietor of a general merchandise store at Chippewa Falls, 
Wis. 

"Cincinnati, Ohio, 
"Dear Sir: December 12, 1911. 

"We are expressing you to-day, charges prepaid, six packages 
(25-cent size) of Crisco. Please accept these packages with our 
compliments — they are given to you absolutely free. 



130 ADVERTISING AS A BUSINESS FORCE 

"Our national advertising campaign on Crisco begins in 
January, when large advertisements appear in practically all 
of the leading magazines, especially in the household publi- 
cations which are so largely read by housekeepers. 

" We want you to have Crisco in stock, so that you can supply 
the first demand this advertising will create among your 
customers. It will be big advertising and the magazines will 
be read in several million families. You will have calls for 
Crisco and so will every other grocer who sells to a good family 
trade. Sell the six cans, and then order what further supply 
you need from your jobber. 

"The price is as follows: 

" 1 case, (36 cans each), $7.50 per case; 5 cases (36 cans each), 
$7.45 per case; 10 cases (36 cans each), $7.40 per case. 

"We enclose copy of our January advertisement, which 
we feel sure you will read with much interest. 

"At the present time the jobbers only have Crisco in the 
25-cent size, the same that we have sent you, but after the first of 
the year we will be in a position to supply Crisco in 50-cent 
and $1.00 sizes also. 

"Any further information you may desire will be promptly 
given you. "Yours respectfully, 

" The Procter & Gamble Distributing Co." 

Mr. Hjermstad replied to this letter as follows : 

"The Procter & Gamble Distributing Co., 
" Cincinnati, Ohio. 
"Gentlemen: 

"We have received the six cans of Crisco, forwarded to us 
by express in accordance with your circular letter, dated the 12th. 

"While we appreciate your kindness in sending us the six 
cans free of charge, and recognize the spirit which prompted 
you to present us, entirely unsolicited, with so generous a gift, 
we cannot conscientiously act upon your suggestion to place 
an order with our jobber for your product. 

"At your quoted price of $7.50 per case of 36, 25-cent cans, 
each can of Crisco would cost us nearly 21 cents. It costs us 
close to 18 per cent, to do business, which would leave us a 
profit of less than one cent per can. 

"We call it bad business to ask a merchant to handle 
your goods on such a basis of profit. 



THE "REGULAR" RETAILER 131 

"We trust your advertising campaign will not be a disap- 
pointment to you and that the hundreds of thousands 
Not a of dollars you will thus spend will not be entirely 
living wasted. Personally, we think if part of that money 
for the were spent with the grocer in the way of better profits 
Retailer to him, the result would be far more satisfactory to 

both manufacturer and dealer. 
"Anyway, we know it is time for the retail grocer to wake 
up and protest against the unfair treatment accorded to him 
by so many of the national advertisers of the day who want 
to make of him a mere automaton for the vending of their 
wares, with little or no compensation for services rendered; 
the customer simply puts the money in the slot and the manu- 
facturer gets it all. 

"Yours truly, 
" The Success Store Co., 
"Per O. P. K. H., Secretary." 

By this it might be taken to infer that Mr. Hjermstad had 
a grievance. Also that something was wrong with the Crisco 
selling scheme to provoke such an attitude on the part of a 
distributor. 

Mr. Paul Findlay, who was conducting a department under 
the name of "Hy Credit," in the Twin-City Commercial Bulletin, 
for the benefit and uplift of the retail grocer, received these 
letters from Mr. Hjermstad with the request to look into the 
matter. 

With the arrival of this correspondence Mr. Findlay realized 
its vast importance. Here was a situation existing between 
manufacturer and dealer staged to take advantage of. Hasty 
action might waste the opportunity. Good judgment, on 
the other hand, might easily result in great and widespread 
betterment for both maker and distributor. 

Fundamentally the Crisco selling scheme was wrong. Taken as 
an average, 20 per cent, is a fair profit for a grocer to make 
on a product, but by charging the grocer $7.50 per case, and 
fixing his selling price at $9, the profit to the grocer was 
limited to 16f per cent. 

Consider this if you please. The Crisco Campaign had 
only just started, on the wrong basis to be sure, but still 
there was ample time to work some change. What was the 
remedy? 



132 ADVERTISING AS A BUSINESS FORCE 

A brief analysis of some representative Procter & Gamble 
products will point it out. 

Take Ivory Soap, Large Ivory, as the 10-cent cakes are 
called. Large Ivory was planned as a 10-cent seller. Present- 
day costs are as follows: Single box, $7; 5 boxes, $6.92; 
10 boxes, $6.85; 25 boxes, $6.80. Selling at 10 cents, the 
margins on these costs are 30 per cent., 30.80 per cent., 31.50 
per cent, and 32 per cent. These are certainly generous margins 
on an article nearly as staple as sugar. 

Now Large Ivory may be cut by the grocer, with the following 
results. If sold at 9 cents, the grocer retains margins of 22.22 
per cent., 23.11 per cent., 23.88 per cent., and 24.44 per cent. 
If sold at 3 for 25 cents the scale drops below the line of safety 
with margins as follows: 15.96 per cent., 16.92 per cent., 
17.76 per cent., and 18.36 per cent. 

Procter & Gamble had thus always made it possible on all 

their products for the dealer to realize liberal margins — goods 

for which at the same time a steady market had been 

How the created through general advertising. Procter & 

Corrected Gamble had always given dealers their goods on a 

basis where honest margins could be made when sold at 

the fixed standard price, but what did the dealers do.^^ The 3 

per cent, or 4 per cent, of natural-born cutters, together with 

an unfortunately large percentage of dealers who do not do 

enough business to correctly compute their margins, destroyed 

the plan by taking advantage of its liberality. 

The result was that when Procter & Gamble were ready to 
launch Crisco a plan was shaped to head off the minority 
from price-cutting instead of attempting to co-operate with 
the majority; those who will take and keep an honest margin 
when it is offered. 

The selling scheme which Procter & Gamble launched and 
which caused all the trouble was the very simple one of setting 
a price to the dealer which allowed such narrow margin that 
even the blind could see their loss if they attempted to cut. 
In their attempt to force the dealer to maintain the advertised 
price they had incurred his enmity. 

This plan fixed the possible margins on Crisco as follows: 
On one case purchased, 16f per cent.; on five cases, 17.22 per 
cent, plus; on 10 cases, 17.77 per cent. plus. Thus the biggest 
purchaser was prevented from making a legitimate margin, 
right from the start. He was up against a stone wall, for, 



THE "REGULAR" RETAILER 133 

remember, Crisco was advertised to the consumer at a fixed 
price per can. 

All this Mr. Findlay reaHzed — and more. He realized 
that Procter & Gamble had, perhaps very naturally, been de- 
ceived by the noise of the few into forgetting the silent, intelli- 
gent many who figured right, retained fair margins, and plugged 
ahead honestly, content with the legitimate profit allowed them. 

There was only one thing to do — and if done instantly the 
day might be saved. The price to the dealer must be reduced 
30 cents per case, so that the smallest buyer could realize his 
full 20 per cent, profit. 

To the everlasting credit of Procter & Gamble, who through 
the entire period had really been anxious to work with the 
dealer, the price on Crisco was reduced, not 30 cents but 
50 cents per case, with the following results: 1 case yields the 
grocer a profit of 22.22 per cent, plus; 5 case lots 22.77 per cent, 
plus; 10 case lots 23.33 per cent. plus. 

Thus a wrong selling scheme was changed into one which 
yielded the grocer a liberal margin of profit and changed his 
attitude into one of interest and co-operation. 

Do not be deceived into thinking that this argument against 
price-cutting is a sweeping protest against the entire system 
of price-reduction. Manufacturers and retailers alike are up 
against this question — "How far is it legitimate to go in 
price-reduction on special occasions?" 

It is quite true that certain articles are handled for less than 
cost of doing business, yet the statement cannot be made that 
they do not yield a net margin. Other articles pay heavy 
gross percentages, yet there is nothing to prove that there is 
anything left net, after they have been handled. 

In the matter of price regulation the best guide is the judgment 
of the careful merchant — an educated judgment. Price- 
cutting, on special occasions, requires cool-headed calculation. 
But to return to Crisco. 

Having decided to reduce the price to dealers there yet 
remained something else to be done — to reach the distributors 
with the message and to establish a new and closer harmony of 
relations between manufacturer and retailer. And to gain 
this end, to talk to these distributors in their own language 
and through mediums which would carry the message 
of Crisco home, it was finally decided to begin a trade 
paper campaign. . . . 



134 ADVERTISING AS A BUSINESS FORCE 

The complaint of Mr. Hjermstad, which was representative 
of grocers everywhere, proves just this: "UnwiUing service 
is never good service," and had Procter & Gamble, through 
the expenditure of a great amount of money advertising to the 
consumer, finally forced grocers to handle Crisco the price paid 
for the distribution would have been excessive. 

It costs less to make grocers want to handle a product than 
it does to try and force them to do so. When a grocer buys 
a product because he is convinced of its merit and because it 
shows him a good profit he buys to sell it. If he is forced into 
buying against his will he may hand it across the counter when 
it is called for, but he certainly will not be likely to push it. 
Get the grocer's interest and the business is won. Allow him 
a fair profit and he keeps customers buying the product that 
yields him a fair margin. 

This Procter & Gamble case brings out the point which 
remains uppermost through the records of any case of inducing, 
forcing, or helping the retailer. That point is the fact that 
what the retailer is most interested in is a chance to make 
money and retain his self-respect as a merchant. Anything 
that helps him to do this is really "dealer help," and whatever 
wheedles him into pushing goods on which the profit is small 
for the mere increasing of producer's sales may work for a 
while, but ultimately it is apt, not only to fail, but to become 
a positive obstacle to the retailer's interest in selling the goods. 

DEALER LITERATURE 

"Dealer help" is of almost countless types and new forms 
are continually being devised. The most common type of all 
is what is known as "dealer literature." 

So much "dealer literature" is now being put out that it 
is a grave question whether this form of appeal to the 
dealers, in spite of its directness, is not one of the most diffi- 
cult to make effective. This type of appeal to the dealer as 
it is viewed by the dealer himself is suggestively described 
in the following record kept by Garrett Byrnes, a druggist in 



THE "REGULAR" RETAILER 135 

Maplewood, N. J. It is in the form of a six-day diary in 
which this suburban dealer sets down his impressions of each 
piece of "dealer Hterature" as it is received. The vivid moral 
of this recital is the fact that the "dealer literature" which 
is effective is that which is well above mediocrity both in 
its message and in its form. 

*We do have our thoughts about the mass of "dealer lit- 
erature" that reaches us — we dealers. Occasionally we 
experience the reaction that results in our boosting 
Six Days ^^^ manufacturer's goods. Sometimes we content 
gi^'s Mail ourselves with merely thinking sarcastically about the 
schemer who foozled so miserably when a day's 
investigation outside the beloved office would have set him 
right and have enabled him to put in our hands a pamphlet, 
a price-sheet or a folder that would put us "on our toes." 
I'm glad to be able to get this hearing in Printers^ Ink. I 
have tried to be fair and to record the actual impressions of 
specific pieces of matter. 

There is still another consideration. We dealers aren't 
all waiting to toss the folder or whatnot on the well-known 
junk heap which fable says lies outside our back door. On 
the contrary, and I am speaking for many, many other dealers 
I know, we look to the manufacturers to furnish us ever and 
anon with suggestions that will help us sell more goods and 
thus be more prosperous. 

Every dealer worth while knows that out of his morning's 
mail he may gain a new idea, bringing with it a little more 
enthusiasm, generated by the advertising man's genius. We 
are more than ready to put in a new article or a new line if 
we are given data by which we can measure its probable worth 
to us in dollars, cents, and our customer's good-will. 

First Day 

1. A neat little condensed letter from the Rat Biscuit 
Company, bulking small in the centre of a large white sheet 
with no superfluous words, no ink wasted telling me of the 
superiority of their goods. What is said is everything I want 
to know. An enclosed post-card is a blank order for one 
dozen, one free and a window display. 

*Printers Ink, November 9, 1911, p. 24. 



136 ADVERTISING AS A BUSINESS FORCE 

Having a small suburban business I calculate a dozen is a 
fair order for me. My windows, not fronting on Broadway, 
I can occasionally let them to the manufacturer at cut rates. 
The manufacturer gets five feet of window space for a week 
and I get a package of goods worth ten cents. We retailers 
will do these things better some day and charge "union" 
rates for good window space. 

The letter was so short I could not help reading it. That 
caught me. 

Time : half minute to read letter, half minute to read card, ten 
cents profit and perhaps a little more business. 

2. A post-card (I always read post-cards) stating that 
Dr. Doan's Directory of the United States will soon instruct 
the people that they need kidney medicine and the retailer 
is requested to stock up in time for the rush. 

If I could approve this class of goods as being of benefit 
to my patrons I would like the advance notice that direct 
advertising was to be done, and would at least be on the lookout 
for increased demand. One minute wasted. 

III. Another post-card from a fountain-pen company asking 
me to write them for their proposition. Why not send the 
proposition first time.'* No, I won't write them. Time 
wasted, half minute. 

IV. The "Certificate" from the Florence Manufacturing 
Company is a very clever little sheet in colors, six good jokes 
and as many funny pictures, many paragraphs on the superi- 
ority of the goods and reasons for the dealer selling them. 
About five lines of real meat : "Always buy in dozen packages; 
always redeem certificates; three certificates exchanged for 
five brushes; six certificates exchanged for ten brushes." 

This is all I want to know about it. 

Ten minutes to read, three minutes to sort the wheat from 
the chaff, one minute to think it over. Fourteen minutes 
wasted. 

V. "Another Vaseline Preparation" is the headline on 
a single sheet from the Chesebrough Company, accompanied 
by a cut of the package. 

"White Vaseline and Quinine." Why, yes, I'll need that. 
Why wasn't it made years ago? 

VI. Colgate's goods are all right and the profit they allow 
and maintain is fair. Fair treatment from a manufacturer 
makes their announcements worth reading. I read them. 



THE "REGULAR" RETAILER 137 

Summary: Twenty minutes gone in one morning reading 
ads. Five minutes profitably spent and fifteen minutes and 
much ink wasted. 

Second Day 

I. Samples of cigar pockets, in which to enclose cigars 
when selling them, from the Racine Paper Goods Company. 
These made a bulky package that indicated a waste of time. 
One glance, however, showed my name and address neatly 
printed on each pocket. This was interesting and worth 
looking into. 

The quality was good. The price, terms, transportation 
cost to me and all particulars I would need or care to know 
were concisely stated in the letter accompanying samples. 
I was in doubt about nothing and needed to ask them no 
questions. The letter told it all and there could be no ground 
for misunderstanding. 

Attached to the letter were twenty-four styles of printing 
to select from, and an order blank. Had my name not been 
printed on the pockets I would probably have given the propo- 
sition little attention. I decided to order a quantity as sopn 
as I could use them. 

Five minutes for the above. 

II. "An Exclusive Agency Proposition That Draws Trades, " 
and a hand pointing to 1, More Business; 2, Better Prices; 
3, Better Profits; 4, Satisfied Customers; 5, Success, would 
have insured my looking inside the folder sent out by the 
Seamless Rubber Company even though I had not already 
taken the agency for their goods. The exclusive sale of a 
profitable article of real merit should be sought for by any retailer, 
and he will read a reasonable amount of advertising matter 
in regard to it. 

According to the folder, "One druggist discovered that his 
business was largely built up as a result of selling goods no 
other druggist in town could handle." "Kantleek goods 
guaranteed for two years." This should be an inducement 
capable of satisfying any one and as long as the quality and 
guaranty hold and the prices are maintained I am willing to 
give time and attention to this or any other good thing. Five 
proofs of ads in many publications notify the agent to get 
ready for business and the non-agent that he is losing a good 
thing. 



138 ADVERTISING AS A BUSINESS FORCE 

III. Belle Mead Sweets' Christmas notice. A single sheet 
neatly printed asking for the placing of Christmas order by 
November 20th and promising only fresh and not stored goods. 
It warns the retailer against placing his order extra early and get- 
ting stored goods. This is a notice to Belle Mead agents only. 

Coming as it does from a house whose goods have always 
been satisfactory and whose treatment of the retailer could 
not be better, I am glad to read it and accept its statements 
at face value. 

The value of advertising matter is increased many fold 
when backed up by honest treatment from the house sending it. 

Five minutes for the Belle Mead notice and ten minutes 
for the Kantleek ad, and I feel more than ever like pushing 
those goods. 

Summary: Twenty minutes this day with good matter 
and about one to dispose of several patent medicine ads that 
are not worth mentioning. 

Third Day 

I. A Package of samples for an asthma cure together with 
a letter and a 10 x 15 sign. One minute is wasted in looking 
it over and no time at all in throwing it away. I have neither 
the time nor the desire to foist upon my patrons countless 
new "patents," either with or without samples, unless de- 
manded by them. 

II. Sample sheets of very neat embossing done by a clever 
little device by Roovers Bros., Brooklyn. This is interesting, 
but the twice fifty-seven styles make it hardly possible for a 
small retail drug business to handle them with any satisfac- 
tion. In selling from the list there would be a distinct loss, 
as on one twenty-five-cent embosser there would be a margin 
of seven cents to pay for selling, writing order, stationery, stamp, 
and delivering. This might be satisfactory to the stationer 
but not to the druggist. Time, ten minutes. 

Fourth Day 

I. A letter from a music publisher with sheet containing 
bars of popular songs. Selling sheet music does not appeal 
to me at this time and I doubt if the average retail druggist 
can do it profitably, if all of the time required for it is considered. 
One minute. 

II. A letter from a house selling dyes offering several 



THE "REGULAR" RETAILER 139 

kinds of advertising matter either with or without an order. 
This reminds me that I have some of their goods not moving 
very well. I will write for ad matter and perhaps both the 
manufacturer and myself will profit by it. Three minutes 
for this. 

Fijth Day 

I. A letter-size printed sheet from the Gillette Sales Com- 
pany, stating amount of advertising being done by them and 
proof of ad to appear in twenty -eight different publications. 
As the Gillette Company protects the price, we will do our part. 
Five minutes. 

II. A twenty -four-inch sheet with ten halftone reproductions 
of as many different window displays made by means of the 
"Oaken- Wood Window Fixture" plans. These are very 
interesting and enable one to make an excellent window display 
in a very short time. A money-maker and a time-saver 
combined. I need that. 

Sixth Day 

I. The "Yellow Label," a new and presumably periodical 
publication, by E. E. Dickinson Company, with cuts of their 
office and distillery, labors through four letter-size pages to 
tell the retailer of the superiority of their goods. As I am 
satisfied of this, after having sold the goods for many years, 
I do not wish to spend fifteen minutes reading about it. 

II. Gaudily colored ads showing premiums offered by the 
Wilham Wrigley Company for quantity orders. A half hour 
at least to read. The increased price asked to obtain the 
premiums would more than pay for them. I will buy my 
gum and furniture of their respective dealers. 

III. A cut of a new style nursing bottle on the envelope 
containing letter and prices excited my interest. 

The letter gave thirteen good features of the article, to- 
gether with prices and argument in favor of its use. The fact 
that a baby could puncture the nipple without spilling the 
milk seemed a good point, and I decided to obtain a sample 
from the Dairy Nurser Department, Clarksburg, W. Va. 

IV. An envelope full of circulars, with prices, etc., of wines 
and liquors. Bang! W^e have too much close at hand without 
going to Ohio and Indiana for it. 

V. "Think of the other ninety-five" on the outside of an 



140 ADVERTISING AS A BUSINESS FORCE 

envelope containing ofiFers, order blanks, advertisement proofs, 
etc., etc. Too many and too much to read. From the Paul 
Rieger Company, California, perfumers. Is doubtless a true 
statement. Not five of each one hundred persons use an appre- 
ciable amount of perfume, and with all the advertising done 
by this company I have yet to have a bona fide call for their 
goods. 

Several children with the sample fever have written 
them, giving my name as a dealer. But this trade does not 
pay the rent. 

Order blanks enclosed with advertising matter are suggestive, 
and also time-savers to the retailer. It is a "do it now" 
reminder. A letter that looks short is very apt to be read. 
The sight of a full-sized letter sheet filled with print or type- 
writing does not look inviting w^hen many such are received 
each day. 

I have, in fact, mentioned only about half of the ad matter 
received in six days. 

If the manufacturer will name the article, state its use and 
good qualities concisely, giving price and terms and explain 
method of protecting price, the average druggist can quickly 
decide. Long drawn out descriptions and suggestions are 
apt to be thrown away. 

About three quarters of the time the dealer spends on ad 
literature is given to worthless, or useless, matter. And yet 
he is benefited by a reasonable perusal of all that comes his 
way. In looking over it quickly or slowly I find one's judgment 
upon it is practically the same. And the druggist is necessarily 
becoming a keener business man. 

Let the manufacturer furnish a good article, and main- 
tain a price that allows a reasonable profit, and accord 
square treatment. 

WINDOW DISPLAYS 

Another type of "dealer help" which has grown very popu- 
lar within the past few years is the putting out of window 
displays by the national advertiser. The dealer's window and 
its value to the national advertiser is a comparatively recent 
discovery, and some of the national advertisers have made 
very profitable use of this form of "dealer help." The dealer 
himself, in many cases, has shared in the profits thus secured. 



THE "REGULAR" RETAILER 141 

One of the most successful of these national advertisers is 
the Victor Talking Machine Company, whose experience is 
thus described by Ellis Hansen, in charge of the window dis- 
play work of the company : 

* ... A well-dressed show window may be compared 
with a friendly greeting to a prospective customer. Everybody 
looks into the window, either consciously or unconsciously, 
and retail dealers should be educated by manufacturers to 
realize how many friends a store gains through well-dressed 
and interesting window displays. 

A dealer pays one half of his store rent for location and 
window space, and it was to aid Victor dealers in deriving all 
the possible benefits from their windows that the Victor Com- 
pany inaugurated its window display department. 

While the Victor Company is probably not alone in realizing 
the tremendous influence that good windows exert in stimu- 
lating trade, they, nevertheless, have had the courage of their 
convictions, and are maintaining a large and costly department 
for designing and building exclusive Victor trims, and ex- 
clusively demonstrating how this important method of retail 
advertising can be converted into a national advertising prop- 
osition of great magnitude. 

About ten years ago, when I entered the music business as 
a window designer, I was instantly drawn toward the talking 
machine. The Victor appealed to me like a modern Aladdin's 
lamp, and offered to the designer a field as wide as the entire 
world of music, and the opportunity of arranging timely win- 
dows for any and all seasons. 

Fortunately, my firm, Sherman, Clay & Co., of San Francisco, 
did not restrain me in regard to designing and planning these 
displays, and in a short time the window devoted to the Victor 
became the most popular of all our windows, and requests for 
photos came from everywhere. 

Window Even before I was called to Camden to take up the 

Displays of work for the Victor dealers in general, the Victor 

the Victor Company had for years advised their dealers to take 

ra^Hngr proper care of their show windows, and to give 

window displays more attention, even offering prizes 

for the best Victor windows. They followed closely the window 

*Printers' Ink, January 19, 1911, p. 57. 



142 ADVERTISING AS A BUSINESS FORCE 

advertising of Lyon & Healy, and of Sherman, Clay & Co., the 
window displays of these two stores proving to them that all 
Victor dealers should be educated into this method of adver- 
tising. 

It was the original intention to have me travel around the 
country, build displays for each dealer upon whom I called, 
talk the value of window trimming, and to arouse sufficient 
enthusiasm in each dealer to make him realize the real value 
and importance of his window. With the assistance of an 
artist and a boy and in a very small room in one of the factory 
buildings, I designed six windows, photos of which I expected 
to leave with each dealer for their future guidance, after I had 
arranged one display for him. 

Then, after the six windows were completed, we advanced 
to the idea of cataloguing these displays and offering to sell 
the material to our dealers at cost price. It took us several 
months to get the department ready, but during that time 
the idea of ready-made window displays was thoroughly ex- 
ploited in the Victor house-organ, The Voice of the Victor, 
and when we issued our catalogue, success was instantaneous. 
The orders have rapidly increased each month, and at the 
present time we have a large force of assistants and helpers, 
and occupy the entire floor of one of the large Victor buildings. 

These displays are sold at actual cost. Our dealers were 
quickly convinced that the very low price we asked was not 
an expense, but a first-class investment, and we now have 
the confidence of many hundred dealers throughout the country 
to the extent that they have signed our standing orders for all 
Victor displays issued during the next twelve months. We 
sell most of the windows for five dollars, but if they were made 
singly they could not be prepared for many times that amount, 
for we have in our employ some of the best artists and show-card 
writers to be found, and insist that these designers take all the 
time that their work requires. 

To design and manufacture window displays in quantities is 

by no means an easy task. In the first place, these displays 

must be striking. While most persons are fascinated 

^/«ai a by a pretty window, beauty alone is not enough to 

Disv"^ make a successful display. Each window must not only 

Must Be tell an interesting story, one that will be understood 

without too much mental effort, but it must, like all 

other advertising, create a new desire to possess the article dis- 



THE "REGULAR" RETAILER 143 

played. The buying public is too busy to linger in front of a 
show window, but if your point is well illustrated, so that it can 
be understood at a glance, it will unconsciously create sufficient 
interest in most people to cause them to stop, and this is the 
first and main object of a show window. 

On the other hand, these displays must be inexpensive. 
It would be unfair to the smaller dealers to design and manufac- 
ture expensive displays that only the larger stores could afford 
to buy. 

Another hard problem is to prepare displays for shipment. 
When it is taken into consideration that we are not only ship- 
ping window displays to nearly every point in the United 
States, but to Europe, South America, Canada, Hawaiian 
Islands, and even to China and Japan, it will readily be seen 
that if the material is too bulky or too heavy the cost of trans- 
portation will be entirely out of proportion to the entire cost 
of the display. We issue these new displays every month, and 
great care is taken to make them as compact and as easy to 
assemble as possible. 

A large show window, containing electric lights and every- 
thing else that goes to make up a modern shop window, is 
erected in our shop; we, therefore, see each new display just 
as it will appear in the Victor dealers' windows. 

The success of the window display plan, however, depends 
largely on the co-operation of the dealers, many of whom have 
written us, offering valuable suggestions. 

Nearly all dealers who originally bought our displays have 
bought again and again, and have shown a great deal of interest 
and patience in setting up our displays in windows of odd 
shapes. Our displays have been so simplified that it requires 
very little effort to put them together, but at first we under- 
estimated the difficulties with which many of our dealers had 
to contend. . . . 

Only a few months after we sent out our catalogue of the 
first six ready-made windows, the plan was introduced in 
Europe by the Gramophone Company, Ltd., and on my recent 
trip abroad I had the satisfaction of seeing some of these dis- 
plays not only in England, Germany, and France, but in smaller 
countries like Norway and Denmark. In the United States 
several firms have taken up the idea, and one company is 
closely following out the plan inaugurated two years ago by 
the Victor Company. . . . 



144 ADVERTISING AS A BUSINESS FORCE 

DEALER HELP THROUGH A SELLING SYSTEM 

"Dealer help" has possibilities for development far beyond 
these more common forms of sales "boosting." In some cases 
the plans of "dealer help" go so far as to make them an actual 
basis of co-operation between the producer and the various 
factors in the selling system. 

There is perhaps no better illustration of an entire distribu- 
tion system based on "dealer help" than the selling system 
worked out for handling Sealshipt oysters. Nor is 
Gdting the ^.j^^ interest of this illustration lessened by the fact 

JJealer to . " , 

Work into that one serious defect in the system made it nec- 
the Sales gggary to materially modify the original plan. This 
plan is thus described in its main features by Kirk 
S. Pickett: 

*The Sealshipt Oyster System has about 35,000 dealers 
who act as agents for Sealshipt oysters. Although it is in the 
advantageous position of being in a certain sense a monopoly, 
its marked success in developing its market must be credited 
partly to its peculiarly efficient dealer work. 

It says to the dealer: "You are only one of several dealers 
selling our oysters in your city. But you are not in competition 
with one another. You are co-operating with one another 
to develop more business for each of you. You are in co- 
opetition, not in competition. What competition there is, is 
of the kind that you all can fight to common advantage. The 
oyster sold from the wooden tub is your only competitor. 
Remember — co-opetition, not competition between Sealshipt 
dealers." 

"Co-opetition" is a word the Sealshipt concern coined to 
convey its understanding of how the Sealshipt dealers should 
act toward one another 

The dealer looms large as a factor in the seUing machinery 
of the Sealshipt oysters. He is the centre of tlie Sealshipt 
advertising campaign. Upon him depends the success of a 
vigorous consumer campaign in the magazines and the news- 
papers 

* Printers lid; January 19, 1911, p. .57. 



THE "REGULAR" RETAILER 145 

It was only a few years ago that a Wisconsin inventor worked 

out a plan of a small refrigerator box for shipping oysters under 

perfect sanitary conditions. It was looked upon as a 

Tlie great boon for the inland states, where good oysters 

Qy^^ had been hard to get because of the difficulties of 

System transportation. L. C. Brooks made a business of 
shipping Sealshipt oysters from Norwalk, Conn. The 
demand has grown and the Sealshipt Company has been 
acquiring larger and larger sources of supply. Its beds, ag- 
gregating 140,000 acres, proved insufficient and it went over 
to Great South Bay and bought tens of thousands of acres 
of Blue Point beds. . . . 

The company is assuring its dealers that it is in position 
to supply all the orders which they may give. It rests with 
them to develop the demand in co-operation with the com- 
pany's advertising and in " co-opetition " with the other dealers 
handling Sealshipt. 

There is nothing that is mysterious about the procedure of 
this dominating concern. Its striking results may be ascribed 
to: first, the idea of a refrigerator container; second, to its 
manner of licensing the jobber and the dealer, and third, to 
its vigor in creating a consumer demand by advertising and 
by urging the dealer to extend his co-operation. 

The refrigerator container is called a Sealshipticase. With- 
out this the Sealshipt system would have no "talking point" 
and no point of distinction setting it apart from the concerns 
that sell oysters in wooden tubs. 

Under the license the dealer agrees to sell the oysters only 
from the Sealshipticases and to observe hygienic conditions. 
He also agrees not to sell Sealshipt oysters below 25 per cent, over 
cost. He is free to increase this margin as much as he wishes. 

Under the Sealshipt system there is no opportunity for the 

jobber to tamper with the stock. The pressed-steel container 

An Attempt ^? ^^^^^^ by the shipper on the coast and when the 

to Make jobber receives the oysters he transfers the container 

the Selling to a dealer Sealshiptor without breaking the seal of 

Steps Work iliQ container. Seals are not furnished to jobbers. 

together j^^^^ retailer and no one else breaks the seal. The 
company guarantees that its oysters are secured from the beds 
and packed in containers before night and that they will be 
delivered to the dealer anywhere in the United States with a 
flavor unimpaired. 



146 ADVERTISING AS A BUSINESS FORCE 

The dealer agrees to keep his oysters exposed for sale only 
in the Sealshipticases, which are attractive cases of metal, 
designed to be an ornament to the store. He is urged to make 
window displays with the cases as a central feature. There 
seems to be no disposition to hold a club of fear over the dealer's 
head. Rather he is spurred on to renewed activities by having 
explained to him regularly through bulletins and booklets how 
Sealshipt dealers have increased their business from 100 to 
300 per cent, a year. 

The company has an "inspiration" booklet, kept revised 
up to date, entitled "The Sealshipt Oyster System. How 
It Links Shipper, Dealer, Consumer for the Benefit of All." 
It is packed full of facts about getting sales; it explains the 
system's plan of work; it contains a list of cities where Seal- 
shipt jobbers operate; it outlines the extensive advertising plans. 

Larger advertising the coming sea.son is promised than ever 
before. Among the magazines on the list for continuous large 
copy are the Delineator, the Woman s Home Companion, Good 
Housekeeping, National Food Magazine, the Saturday Evening 
Post and the Ladies^ Home Journal. Big newspaper space 
will appear in the larger cities of the United States and Canada. 
A few of the cities in which Sealshipt advertising will appear 
are St. Louis, Cincinnati, Detroit, Denver, Des Moines, St. 
Paul, Toronto, Minneapolis, Buffalo, Portland, Me., Portland, 
Ore., Manchester, Seattle, Montreal, Salt Lake City, Memphis, 
Louisville, Hartford, Worcester, Wheeling, Dallas, Ft. Worth, 
Atlanta, Milwaukee, Rochester, Omaha, San Francisco and 
Los Angeles. 

The dealer's name is printed at the bottom of the ad. If 
there is more than one dealer, all the names are given. 

In addition to this, advertising copy is furnished the dealer 
which he may run at his own expense. The importance of 
the dealer's identifying his store with the Sealshipt campaign 
is urged. If some of the ads are too large for one dealer to 
pay for, he is advised to club with the other dealers in his 
town and all share the expense. 

This copy — magazine, newspaper or street car — is educa- 
tional to a degree. The reader is made to understand why 
oysters, till the advent of the Sealshipt system, did not lend 
themselves to sanitary shipping inland. The novel features 
of the Sealshipt system are pointed out. Some one with a 
knack for writing copy that creates hunger — "appetite copy" 



THE "REGULAR" RETAILER 147 

it has been called — has had to do with this campaign. And 
the interesting thing is that this appetite is created for the 
Sealshipt variety of oyster and not for that sold other- 
wise. ... 

L. C. Brooks, who has been chiefly responsible for the growth 
of the Sealshipt business, writes Printers'' Ink as follows : 

"One of the principal changes that will take place in our 
campaign at the beginning of the new season in the fall of 
1911 will be the handling of oysters in the shell, in a much 
larger way, as well as the sale of opened oysters, in which we 
are largely engaged at present. We think our method of price 
maintenance and co-operation with the dealer — the spirit 
and policy which we term ' co-opetition ' — is a very vital part 
of the sales end of our business."* 

EXPANDING THE FIELD OF DEALER HELP 

The limits of "dealer help" are by no means reached by 
the development of a selling system in which each factor 
co-operates in the extension of sales. The idea of close co-opera- 
tion between the various factors in the selling system is 
capable of very wide expansion. Even the small retailer to-day 
constantly faces this fact; his problems of internal organization 
may be individual, but when he buys and sells he is dealing 
'v\dth problems of distribution in which his work is only one link. 
His one safety is in knowing whether the part he plays is being 
played, not merely well, but in the best possible way. C. C. 
Casey, writing under the title of "Dealer Help Which Counts," 
suggests that the national advertiser is in a position to help the 
retailer put himself on a sounder commercial basis by assisting 
him in working out really effective methods of record keeping and 
cost accounting. In this Mr. Casey puts his finger on one of the 
most sensitive places in the problems of the present-day retailer. 

*The sequel to this story is found in Printers' Ink, December 14, 1911, p. 18. 
A number of retailers abused the system by substituting, in the retail containers 
(Sealshipticases), oysters which were not up to the company's standard. 
Hence it was necessary to go one step further and seal the oysters in packages, 
to be opened only by the final consumer. The remainder of the system was 
left unchanged. 



148 ADVERTISING AS A BUSINESS FORCE 

*A certain retailer in Indiana was prevailed upon by a big 
manufacturer, a national advertiser, to stock a line of goodi 
he had not previously been interested in. 

The manufacturer played strong on his national advertising, 
and promised to tie it up to the store with attrac- 

Where tive window cards and a campaign in the newspapers 

^l^ of the little city, over the dealer's own name. 

Failed ^^ the strength of these promises and expenditures, 
the dealer stocked very heavily, on long-time credit. 
The goods moved fairly well and everything seemed lovely for 
a while. But before the bills for the stock came due the 
dealer found himself financially embarrassed. Being unable to 
get further credit or to borrow from his bank, he went broke. 

The manufacturer had aided this dealer to push the new line, 
had given the regular "dealer co-operation" at big expense, 
and had come out a heavy loser. 

The dealer didn't know he was getting into such a tight 
place — they seldom do — but he had figured that the advertis- 
ing would help him to overcome some pretty bad competition. 

It wasn't window displays, free advertising, nor demonstra- 
tions, however, which this dealer needed most. WTiat he needed 
was better methods of knowing the condition of his business. 

If he had known several months earher that he was getting 
into such a tight place he could have saved himself. 

But he didn't keep any books, at least none worthy of the 
name, and didn't see the real storm till it broke over his head 
and "busted" him over night. 

The manufacturer who sells through dealers is successful 
only in proportion to the success of his dealers. 

Of course, a dealer handling many fines could sell a large 
quantity of one kind of goods and very little of any other kind. 
In this possible but not probable event the one manufacturer 
would profit until the sheriff sells out the dealer. 

There is a dealer in Michigan who, until about two years ago, 
had just an ordinary retail grocery business. He wasn't really 
making any money; he wasn't really going ahead. 

Like most retailers who are not successful, he had a lot of 
petty troubles in the way of bills, which annoyed him some, 
at times. 

One day he began wondering if all retailers were hard up. 



"Printers Ink, April 11, 1912, p. 17. 



THE "REGULAR" RETAILER 149 

When a dealer gets to feeliug that way he is in a fair way 
to learn something — if he is not a dead one. 

This dealer looked about among retailers in Michigan, 
and soon came to the conclusion that some retailers 

How a were successful ; that some of them were continually 

ff / /"'* forging ahead — making money. When he found 

Found this out, he began asking himself why the successful 

Himself ones were successful? What enabled them to reach 
into his territory and draw his trade away from him? 
As he investigated further, he found that the average retailer 
doesn't usually know so very much about his business; that he 
doesn't usually know, for sure, just where he stands; that the 
average retailer runs his business by guess. 

He found, on the other hand, that the most successful retailers, 
the ones who took business away from him, had complete 
information on their sales, their purchases, and their expenses, 
by lines of goods, by departments, by clerks, etc., every day. 

When he learned this he decided to eliminate guessivork from 
his business, and to provide himself with the information 
which the successful dealers provided themselves with. 

He made an outline of all the information he knew of any 
successful retailer getting. Then he went to his books and 
tried to get the same information about his business. 

But the information wasn't there. His bookkeeping system 
wouldn't give it to him, though he had thought his system 
was about "the real thing." His accounts didn't account. 

Then he decided that he would have a bookkeeping system 
that would give him the information he needed. But he didn't 
know how to get a bookkeeping system. Of course, he knew 
that a public accountant could install one, but he had visions 
of enormous charges for the service. 

One day he mentioned his problem to a salesman from a 
big Detroit wholesale house. The salesman liked the idea 
and promised to see if he couldn't get his house to help the 
dealer out. 

It so happened that the manufacturer had just installed 

a number of machines in his accounting department and was 

about to lay off one of his bookkeepers. Instead of 

a Whole- ^^^'^^o ^1^1 off he was sent out to help the dealer open 

sale Bouse a set of books which would give him the information 

he wanted. The dealer insisted on a complete system. 

He wanted to know about all there was to know about his 



150 ADVERTISING AS A BUSINESS FORCE 

business, once in every twenty-four hours, including which 
clerk sold the most goods; how much profit he made on each 
clerk's sales; which lines of goods sold the easiest; how much 
he lost through each of a score of leaks, and a lot of other 
things. 

They got the system in operation, at last, and the dealer 
had accounts that did account. But the system immediately 
plunged the dealer and his clerks into a mass of extra work 
that made them all work nights. 

The new problem was solved by training a young woman 
to handle the bookkeeping with an adding machine a^ an 
assistant. The machine shortened the work and eliminated 
nearly all chances for mistakes. 

Within three weeks the dealer was getting the information 
he wanted, and he was feeling the effects of that information 
upon his ability to make his business pay. 

In one year he increased the volume of his business 300 per cent. 

A few manufacturers suffered because he found that some 
lines of goods didn't pay at all. He threw these lines out 
absolutely and refused to carry them. 

But, on the whole, all the manufacturers whose goods he 
carried profited by his success. He sold more of each of the 
lines he carried. 

Manufacturers' goods are passing over his counter in greater 
volume every month. He has become a bigger and a better 
market for every manufacturer whose goods he handles. He 
has become a safer credit risk. 

Recently he opened a second store, acquiring the stand 
of a "dead" retailer in an adjoining town. 

If every retailer in the United States could be changed 
to-morrow from what this man was two or three years ago 
to what he is to-day, the selling power of the retail business 
in the United States would be doubled, at least. 

But a thousand dealers, with good business ability and plenty 
of life, are sleeping soundly within one hour's ride of this one 
dealer who awoke. 

There is something more the matter with the retail business 
than "incompetence" or "lack of capital." It is deeper, 
further back, more vital than that. 

Mercantile agencies say more retail failures are due to 
"lack of capital" than to any other cause, while one failure 
in every five is credited to "incompetence," but 



THE "REGULAR" RETAILER 151 

Attributing failures to either of those causes is hke attributing 
a fire to the ruins it leaves. 

I know a banana peddler, pushing a cart through the streets 
of St. Louis, who does a larger volume of business on a capital 
of $25 than thousands of dealers are doing on a capital of 
$5,000. He turns his capital every day at a good profit. 

In Illinois there is a dealer who does a business of $225,000 
a year on a $5,000 capital. There are 16,000 grocers in the 
United States with $5,000 capital who average less than 
$25,000 gross business. 

The man who fails on $5,000 capital in four or five years 
would probably "blow up " in one or two years if he had $25,000 
capital — if he used the same methods. 

"Incompetence" is due almost entirely to lack of infor- 
mation — not to lack of ability. 

Lack of information in the retail business can hardly be 
due to anything but poor bookkeeping methods — accounts 
that don't account. 

Dealers are not incompetent as a class. Most of them are 
shrewd, sensible, able fellows. 

Their trouble is that they don't really know the results 
of their efforts. They waste their energy. They work in 
a circle and never get anywhere ■ — except into a rut. 

Take the average retailer and provide him with a complete 
statement, every morning, of the previous day's business 
and you won't know his store in a year. 

But if he doesn't know to-day how much goods he sold yester- 
day, and how much he has on hand, he isn't able to direct 
his energies. 

Unscrupulous salesmen from unscrupulous houses come 
along, and — by the aid of extra discounts, threatened increases 
in prices, promises, etc. — load him to the guards with unsalable 
goods. 

Who suffers? The dealer and his real friends. 

If manufacturers and wholesalers would give their dealers a 

real business service, they would get more co-operation 

^ ^p'"/^ from the dealer. He would push their goods with 

Help for ^1^ ^^^ might — and he would be in a better position 

Retailers to push them intelligently. 

Dealers do not need tailor-made window displays 
and hand-me-down selling plans half as much as they need 
bookkeeping co-operation and advice. 



152 ADVERTISING AS A BUSINESS FORCE 

Many people, "bigger" than most dealers are supposed 
to be, have had full-sized bookkeeping problems that they 
couldn't solve. 

Conditions surrounding the retail business make the book- 
keeping problem easily one of the biggest problems the retailer 
has to deal with. 

Nine tenths of them have proven themselves unable to 
solve the problem. They need help on that end of their 
business. 

A few wholesalers and manufacturers are now aiding dealers 
to solve their bookkeeping problems.- 

Among these is the Simmons Hardware Company, of St. 
Louis. That company has saved many of its dealers from 
certain bankruptcy by aiding in the laying out of accounting 
systems which enable dealers to find out how they really stand. 

W. D. Simmons, head of that company, recently told a story 
of how he snatched a hardware dealer from certain failure 
into a fair promise of success by sending a bookkeeper to work 
out a system of accounts. The company has had many 
such cases. 

The dealer kept accounts, but the accounts didn't "account." 
It was like putting money into a gold brick — he put dowTi part 
of the necessary figures, but they didn't give him any real 
information. 

The Simmons bookkeeper analyzed the system and instructed 
a girl in the proper handling of simple double entry books 
which he opened for her. Soon the owner of the store was able 
to get information which enabled him to build a future into 
the plans of his business. If this were a novel, his letter of 
gratitude would make Simmons the hero. 

Another customer of the same house allowed matters to 
go so far before he woke up that he was broke before he knew it. 

This latter hardware man kept no accounts except the 
invoices, and those only until they were paid. He never 
really knew at any time how his business stood, and was a 
very much surprised man when his creditors closed in on him. 

Being unable to produce a statement which would indicate 
ability to make good, he couldn't raise the needed funds on 
such short notice, and had to turn his business over to his 
creditors. 

If you have ever seen a dealer snatched from certain failure 
into sure success by a better grasp on himself and his business. 



THE "REGULAR" RETAILER 153 

you won't doubt the loyalty-producing effect of this kind of 
dealer help. 

It makes him stick and work. It makes him plan. It makes 
him see the value of the other dealer helps. It opens his eyes. 

Wideawake dealers, with the full grasp of their business 
which complete records give, buy in smaller quantities, for 
that is the tendency of scientific buying, but they buy so often 
that they are a mighty profitable outlet. 

Why don't the manufacturers' associations, either as one 

national organization or as state or district organizations, 

maintain some kind of a service department to help 

A Service ^j^g dealer get the inside facts about his own business 

^To^Help which will help him sell more goods.? He doesn't 

Retailers need information about the manufacturer's business 

and the manufacturer's goods half as much as about 

his own business. 

Why don't manufacturing grocers, for instance, work out 
simple yet complete systems for grocery stores and urge the 
grocers to find out, as the Michigan dealer did, the direction 
in which they should apply their energies.? 

Why don't hardware manufacturers work out systems for 
the hardware dealer, and urge him to find out every night 
just where he stands.? 

Why don't manufacturers in each line of business help their 
particular dealers to put their particular businesses on a scien- 
tific basis.? 

If a manufacturer could increase his own sales 300 per cent, 
in each of the 200,000 grocery stores, by teaching the grocer 
scientific retailing, wouldn't it be worth while.? If he only 
did it in 1,000 or 100 stores, wouldn't it fay? 

The great chain-store organizations and the few really suc- 
cessful one-man stores have established beyond question that 
scientific management 'pays in the retail business. 

The average United Cigar Store, for instance, does about 
sixteen times as much business as the average cigar store. That 
is 1600 per cent, in favor of scientific retailing. 
fRd"^M ^^ every retailer would provide himself with as 

Fads niuch information about his sales, expenses, pur- 
chases, etc., as the United Cigar Stores people provide 
themselves with, there would be a wonderful awakening in the 
retail business. 

The United Company Is in a position to dictate to its tTiou- 



154 ADVERTISING AS A BUSINESS FORCE 

sand stores, and goes a little further than "suggesting" book- 
keeper methods. If any United Store does not keep proper 
records, there is "something doing" from the home office. 

Every United Store knows just where it stands, and has 
records to "prove" it. It must pay, for the United is said 
to have recently declared a dividend of 250 jper cent. 

The dealer who knows the exact results of each day's efforts 
soon eliminates the unscientific methods, the inefficient clerks, 
the goods that won't sell, and stops the leaks. 

He is soon able to direct his energies in the ways that make 
for his success — for the success of the manufacturers whose 
goods he handles. 

In the last few months I have had the pleasure of seeing 
a great many letters from retailers who have tasted the delicious 
fruit of new success; who have seen and welcomed greater 
success ahead, made possible by a better grasp on their 
business. 

I have seen them extend the hand of sincere business grati- 
tude; the kind that makes them want to spend hours of 
their own time telling other men of what you have done for 
them. 

There is nothing that inspires an ambitious man more than 
a new understanding of better ways of gaining the goal he seeks. 
It sharpens his mind and his energies. To get this under- 
standing it is necessary for the dealer to keep complete records 
of every transaction of his business. No dealer can hope 
to remember everything. 

Most dealers say they can't afford to Keep the records they 
need. They don't know what they need — though, in their 
ignorance, they think they do. 

That is why this method of dealer co-operation is not an 
Aladdin's lamp to be rubbed and, Presto! "the dealer forgets 
all his other lines to push yours." Oh, no ! The dealer problem 
is a real for-sure, full-sized problem. 

Making dealers see the advantage of more facts in their 
business is a grown-up job for a full-sized man — for a real 
advertising man. 

Some men, and bright men at that, who read this article will 
say it's tommyrot "because dealers do know their business." 
But let them go up against the retailer as some men I could 
mention have been and are going up against him, and they 
will change their mind. 



THE "REGULAR" RETAILER 155 

I have seen the inside of a campaign which has made a thou- 
sand dealers say they didn't know — and they think they are as 
smart as the average. And they are. 

It does cost a Httle money to keep books. But it costs the 
dealer more not to know the results of each day's efforts. 

The Michigan dealer mentioned in this article thought he 
could not afford to keep books, at first. But the books he 
keeps are worth $10,000 a year to him in actual profits — the 
increased business and decreased expenses made possible by 
the information he gets amount to that much in profits. 

The Mayfield Dairy Company, of England, requires each 
of its 742 stores not only to know where they stand, but to 
report the exact sales of each line of goods to the home office 
every night. It seems to pay them to keep records — the com- 
pany last year paid SOO per ceiit. on its capital stock. 

Eventually every dealer will do, on his own account, what 
the Michigan dealer did. The time is coming when every 
retailer will have to be a real business man. . . . 



REVIEW QUESTIONS — CHAPTER VI 

1. What is meant by the term "regular" retailer as it 
is used in the text.'^ 

2. What are the "newer" types of retailer .f* 

3. Why do the advertising problems differ for the two 
systems supplying these two outlets? 

4. What does Mr. Louis consider the best way to get into 
the retail trade of the country.'^ Do you agree with him.f* 

5. What are some of the most common forms of dealer help.^* 

6. What was it that made it necessary to change the 
Sealshipt system? 

PROBLEM QUESTIONS — CHAPTER VI 

1. What does Mr. Louis mean by a "properly balanced 
selling plan"? 

2. What was WTong with the original Crisco plan? How 
was the trouble corrected? Was this the only way? 

3. Can you find any common faults in the bad, and any 



156 ADVERTISING AS A BUSINESS FORCE 

common merits in the good "dealer literature" described in 
Mr. Barnes's diary? 

4. Do you think a system of fines and inspection could 
have been worked out to keep the dealer faithful to the Sealshipt 
system? What is to be said for and against this idea? 

5. How would a manufacturer of washboards benefit by 
working out a really good system of cost keeping for hard- 
ware dealers as a form of "dealer helps"? Would the same 
answer fit a refrigerator maker? 



CHAPTER VII 

ADVERTISING PROBLEMS OF THE NEW TYPES OF RETAILER 

HAVING thus discussed some phases of the place of the 
"old" or "regular" type of retailer in national adver- 
tising campaigns, let us turn to an examination of the 
advertising aspects of some of the various forms of retailer 
of more recent development. The department store, the chain 
store, mail-order retailer, and the co-operative commercial 
enterprises are of comparatively recent growth, and each of 
these as well as the various other types of concentrated or 
modified retailing method introduces new problems in relation 
to advertising of various forms. 

In the case of each of these types of retailing we shall find 
ourselves obliged to work somewhat in the dark because of the 
almost total lack of compiled data covering their operations 
either in size or in character. 

ADVERTISING AND THE DEPARTMENT STORE 

To take up first the department store, we are confronted at 
the very outset with the fact that, whatever may be known 
by a few advanced merchants about the extent of department 
store business and its methods of operation, little of a reliable 
character ever has been published. 

In the seventies there were three notable examples of what 
has come to be known as the department store; these being the 
Marshall Field store in Chicago, the Wanamaker store in 
Philadelphia, and the A. T. Stewart store in New York. 
Unfortunately, no statistical record has been kept of the growth 
of this type of store, nor are there any reliable figures showing 

157 



158 ADVERTISING AS A BUSINESS FORCE 

in detail either the number of stores of this type now in exist- 
ence, the volume of their business, or the methods of purchase 
which they adopt. 

A hst-preparing company in New York offers for sale a pre- 
pared list of 3,836 department stores, while a St. Louis ad- 
dressing company offers to sell a list containing the 

Baffling names of 3,912 such concerns in the United States. 

Lack of From this it would appear that there are at least 
Information . , _^ . . _ i • i 

3,800 stores m the United States winch rank them- 
selves as department stores, although, of course, by no means 
all of these are stores of any very great size. 

No figures have been prepared showing the volume of business 
done by these stores as compared with the volume of business 
still done by their small competitors. It is estimated that in 
100 leading cities the department store business amounts to 
more than $900,000,000 a year. In Chicago the department 
stores certainly do more than $100,000,000 worth of business, 
and the Marshall Field store is said to do an annual business 
of between $30,000,000 and $40,000,000. In New York it is 
perhaps a safe estimate that the department store business 
amounts in volume to nearly twice that of Chicago, while in 
Philadelphia the department store business certainly is three 
quarters as great as that of Chicago. These figures are simply 
estimates, however, and there is little which can be brought 
forward as evidence of their accuracy, and estimates prepared 
by half a dozen estimators probably would show exceedingly 
wide variation. 

The case for the New York department store as a means of 

entrance into the retail markets of the country Is well put in a 

Ente 'n ^^^^^^ ^^ articles on "Breaking Into the New York 

the Retail Market" written by W. R. Hotchkin, Advertising 

Trade Director of Gimbel Brothers, New York, who was for 

1 hrougn 
the Depart- ten years advertising director for John Wanamaker, 
ment Store ^^^ York. Mr. Hotchkin may have rather too large 
ideas of the proportion of the population of the country depend- 



NEW TYPES OF RETAILER 159 

ing on the New York department stores for its knowledge of 
what is new, but he puts his case well. The following quota- 
tions are from Mr. Hotchkin's articles: 

. . . . *0f course, there are many commodities that can 
be sold, and also many that must be sold, by advertising alone 
— before the customer starts for the store. 

But many others — and especially new articles — require 
demonstration and much patient explanation, before they 
secure the foothold that brings people to a store to ask for them. 

A7id no store can afford to stock up with goods that nobody 
asks for, and ivhich it requires persistent expert effort to sell. 

Of course all stores want to sell all the merchandise they 
can. They must have many manufacturers producing goods 
for them. They are always glad to have more manufacturers 
seeking their ti-ade. They are eager to find new things that 
will sell well. 

But a department store is not a jyhilanthropic institution. 

The buyer of a department store must see ready sale for all 
the merchandise he buys. No buyer who does not buy thus 
carefully can hope to hold his job. He \s called a "buyer," 
but he must be, first of all, a seller, . . . and he must 
necessarily seek the lines of least resistance, and buy ready 
sellers. 

The manufacturer must undertake tlie burden of introduction. 

In these days of tremendous advertising the dealer is not 
impressed by the fact that the manufacturer is burning up 
hundreds of thousands of dollars in general advertising. The 
makers of well-known commodities are doing that every year. 

But how shortsighted must be the manufacturer, after 
spending $100,000 for advertising his commodity, if he will 
not spend a few thousand more to make the whole mvestment 
pay. 

I have no new plan to suggest to manufacturers; but I want 
to express my amazement that manufacturers and their 
advisers are continuously trying to avoid doing the one thing 
that experience of many years has proven to be the royal 
road to selling success. 

Just recently there was brought to me a manufacturer who 
had a proposition whereby he desired to invest $2,000 in 

*Printers Ink, October 12, 1911, p. 3. 



160 ADVERTISING AS A BUSINESS FORCE 

samples to be given to our customers; but he demanded orders 

for $50,000 worth of his product, to be used in a year. Then 

he wanted big display space for his demonstration. 

How One His argument was that we should show some con- 

Manufac- fijence in his product. That the sale would be easy. 

Wanted to after what he was going to do for us. I listened to 

ETiter his story, and then I said : 

New York "My dear man, you ask us to have $50,000 worth 

of confidence in a scheme in which you have none. 

You want us to believe in your commodity when you do not 

believe in it yourself. All the gamble must be ours, while you 

go out with a sure thing." 

And yet this man was a representative mamifacturer. I 
have talked to hundreds who expected practically the same 
guarantee from the store. 

This man had a good commodity. We would have been 
glad to co-operate with him. We had the best manager in 
the country, in his line, to promote the proposition for us. 
I told him I was sure we could make the biggest success of the 
scheme that could be made anywhere; that we would go into 
it with enthusiasm and energy; that we would probably sell 
all he expected us to sell; that we would get him the desired 
publicity and introduction, at any rate. 

But we refused to be bound by a silly contract, that was 
of no value to him, if the scheme was a success, and which 
would only compel us to sell a vast quantity of his goods at 
a loss, if it was a failure, and thereby ruin the whole market 
for him. 

Contracts are usually boomerangs — as people learn who 
try to use them as weapons. 
On the other hand: 

Some years ago a young man invented an appliance for keep- 
ing women's clothing in good order at home. He had no capital, 
except enough money to get a few of the articles 
"^wrT^ manufactured. He was working in a small store 
Succeeded ^^^ gave up his position as soon as he found that 
he could secure space in the larg-est store in the 
city for the demonstration of his article. He did the demon- 
strating himself. The article found a ready sale. The store 
made no contract with him; they did not even buy his mer- 
chandise until it was sold. He placed the goods in the store 
on memorandum and sold them himself. 



NEW TYPES OF RETAILER 161 

But the space which the store supplied to him was so valuable 
that his business increased almost as rapidly as he could have 
the article produced. He also found that his location in this 
store, which was of national reputation, brought his article 
to the attention of dealers all over the country. 

In three months' time this young man, without capital, 
had built up a business which might have required a year or 
more if he had used the methods of many manufacturers. 
He had only his two hands and a possible hundred dollars 
to begin with, yet he accepted all the responsibility, demanding 
nothing from the store but a small counter behind which to 
demonstrate his merchandise. 

This young man had the whole secret of success. The man 
who has $100,000 capital may simply multiply this young 
man's possibilities. 

The advertising campaign is most important to the man 
who has capital to invest; and the appropriation may be as 
small or as large as he is able to pay for. But not less than 
25 jper cent, of his appropriatioti should be directly applied to 
deinonstrating his merchandise. 

New York retail advertising is one of the strongest factors 
in creating a national reputation for any commodity. First, 
because of the enormous population, which within the twenty- 
five mile limit is probably one fifteenth of the entire population 
of the United States. Second, because there are continuously 
so many hundreds of thousands of visitors from all over the 
country who go through the larger New York stores. Third, 
because there are constantly in the city the representatives 
of the big stores all over the United States who are keen to 
learn about new things that are being introduced in New 
York stores. It requires only a moment's consideration for 
any manufacturer to realize the tremendous possibilities of 
New York City advertising. 

. . . .*Many a manufacturer sees his big advertising appro- 
priation going out, while his sales just barely keep the business 
going. Other manufacturers are quite satisfied with their returns, 
because they don't realize the possibilities of their commodity. 

One very notable instance of the latter condition has come 
within my own experience during the past few weeks. 

We were preparing the Gimbel September sale of housewares, 



*Pnnters Itilc, October 19, 1911, p. 12. 



162 ADVERTISING AS A BUSINESS FORCE 

and we wanted to do something entirely different from what 
had been done before. Most of these sales are largely exploita- 
tions of cheap enameled kitchen wares. For years the writer 
has been an ardent advocate of aluminmn ware, because of 
its bright, cleanly appearance, its light weight and durability, 
as well as for its sanitary and hygienic superiority over all 
other wares. Then, I wanted to get away from the exploiting 
of cheap wares. 

We got in touch with the leading aluminum ware manu- 
facturers of America; told them our plans, and they co-operated 
with us enthusiastically. They had been what they con- 
sidered liberal general advertisers in magazines, and had their 
wares on sale in various stores in New York City, as well as 
throughout the United States. Business was usually practically 
up to the capacity of the factory, and they were apparently 
satisfied. When we began to talk quantities to them they 
thought our buyer had gone crazy; because our orders were 
for larger quantities than they had ever sold in all New York 
before. And we were planning it simply for one month's 
selling. 

As a feature of the aluminum ware sale we planned a nest of 

three saucepans — in 1-qt., 3-pint, and 2-qt. sizes — and sold 

the three pieces at a combination price. I advised 

A Sale of ^n order of 10,000 sets. The buyer finally got his 

anduT fig^^^ ^P t° ■^'^O^ ^^*^' '^^^ manufacturers thought 

Results even that quantity would last an entire year. They 
said this to the buyer, but he ordered the quantity 
notwithstanding. I was satisfied to have this quantity ready, 
but advised him to have the manufacturers prepared for tele- 
graphic re-orders. After two days' selling the re-orders were 
telegraphed and new quantities hurried forward. B3' the 
middle of September the trade of New York City and through- 
out the country had been so stirred up over the success of the 
Gimbel aluminum ware sale that the factory was inundated 
with orders which could not be executed. 

I have never seen the public so enthusiastic over any mer- 
chandise as they were over the opportunity to buy aluminum 
ware at a moderate reduction of price. Orders for these 
special saucepan sets were increased to an aggregate of 14,000 
sets or 42,000 aluminum pans. And this in addition to all the 
other aluminum utensils that were sold. 

Undoubtedly this event was the inauguration of a new era 



NEW TYPES OF RETAILER 163 

in the manufacture of aluminum ware in America. It not 
only stimulated the use of aluminum ware by housekeepers 
themselves, but it stirred up other stores of New York City 
and all over the country to the possibilities of these beautiful 
kitchen utensils. 

This instance, it seems to me, amply demonstrates the value 
of making an aggressive demonstration in a large store in New 
York City, not only to stimulate the immediate sale of the article 
in question, but to create enthusiasm for it all over the country. 

The one thing that the average manufacturer fails to realize 
is the enormous number of people that visit a big New York 
store every day — a greater number than the entire adult popula- 
tion of any but the great cities of the country. 

Woolworth, the 5 and 10 cent store man, pays enormous 
prices for his store locations, because, as he says: "I want 
to set my traps where mice are plenty." 

Smaller dealers pay seemingly extravagant rentals to open 
a shop near the big stores. Think how infinitely greater is 
the value of selling space right in the heart of a great store! . . . 

Two matters are of primary importance in advertising a 
commodity. The first is usually well taken care of by adver- 
tising experts in agencies whose work is usually splendidly 
done. This is presenting the information to the public about 
the commodity, and bringing the commodity to the public atten- 
tion. 

The second feature is usually neglected. That is, telling the 

public where the article can be secured. Even the person 

Telling the ^^^ ^^^ become interested in an advertisement will 

Public not make the effort to travel all over the city to 

Where find an article advertised, when something else that 

To Go ^yj probably serve the purpose as well can be secured 
anywhere. 

Further, it is most valuable to have the commodity intro- 
duced by one store exclusively. This is because a store always 
takes interest in a new thing which it alone is able to exploit. 
If several stores have the commodity on sale on equal terms 
none of them is willing to spend much money or make any 
great effort to promote it; for the reason that there is no special 
value to the store in doing so. The owner has nothing to 
offer which another store cannot give, and if he offers a low 
price any other store having the commodity on sale may readily 
cut the price and take all the value away from it. 



164 ADVERTISING AS A BUSINESS FORCE 

There are many stores that apparently exist only to destroy 
the market value of certain commodities. They are always 
willing to sacrifice a manufacturer for one day's advertising 
glory for themselves. 

Of course it is most desirable ultimately that a commodity 
should be sold by all stores; but the manufacturer who is wise 
will have patience to wait until his article is properly introduced 
by one good store before trying to sell it to others. 

My advice to a manufacturer seeking to get his article 

introduced in New York would be to select one store which 

seems to him to be best able to introduce his particular 

How to commodity. I would offer to put in my goods on 
Nm^ork memorandum, supply one or more demonstrators, ac- 

Market cording to the space the store could devote to the 
work. I would have printed matter prepared, in 
accordance with the policy and style of the store, having the 
advertising manager write it if possible, and, in any case, 
approve of it officially; and I would pay for any advertising 
of my commodity the store would do. I would very care- 
fully instruct my demonstrators as to how the article should 
be presented, and I would consider it of such importance that I 
would myself be frequently present at the demonstration, and I 
would have my manager present frequently, because I would con- 
sider that nothing that was done in the promotion of the sale of 
my commodity was of any importance in comparison with the 
way in which it was introduced and sold to the New York public. 

When manufacturers begin to realize these facts, and value 
space in a large store at its real importance, and also fully 
realize how small is the value to the storekeeper of their par- 
ticular commodity in comparison with the many other impor- 
tant operations of his own, they will achieve earlier success and 
broader distribution, with a much smaller expenditure of money. 

In the course of this series of articles Mr. Hotchkin takes 
up the much-disputed question of the attitude of the depart- 
ment stores toward trade-marked articles, and gives very 
ably the department stores' side of the equally often-discussed 
problem of placing the store name on articles of standard grade 
or type. In the concluding article of the series he indicates 
the limitations of some of the statements he has made: 



NEW TYPES OF RETAILER 165 

* These articles, written from the viewpoint of one who has 
spent twenty-five years in the retail business, naturally do 
not coincide with many of the ideas of general advertisers. 

But it must be remembered that I am not attempting to 
point out the only way, but rather one good way to "Break 
into the New York Market," with certain kinds of commodities. 

It should also be remembered that I have been asked to 

J , . write on the subject of "Breaking into New York," 

Is Different which means the introduction of new commodities, 

from and by no means implies that they are to be per- 

Permanent manently sold under the same methods with which 

""^^ they have been introduced. 

Having had so many experiences with new commodities, 
and knowing exactly how the big stores feel toward them, I 
have advised that, in most cases, one store should be selected 
for the introduction of many things. 

Now, I am asked, "Is it always advisable for a manufacturer 
to tie up to one store?" and my reply is, 

"Certainly not." 

Each commodity has its own conditions to face, and each 
problem must be individually solved. If the maker of a new 
breakfast food has the capital for a big advertising campaign, 
perhaps he can get all the stores to stock up by making an 
exhibit of his plans. But, if I were a manufacturer, I would 
rather make some proposition to James Butler that would make 
all his stores exploit my commodity in an enthusiastic way. 

Again, if I had a high-class food commodity, and could get 
Park & Tilford to let me exploit it over their name, and dis- 
tribute it through their stores, I would gladly confine the article 
to them, for a liberal introductory period at least. 

My attention has been called to the opinion that Holeproof 
Hosiery suffered from being confined to the stores of Samuel 
Brill, and that, being confined, it made it easy for imitators 
to come on the market. 

I will answer the last contention first. Broad distribution 
never interfered with the coming of a competitive article; for all 
good things, not protected by patent, quickly bring 
lem oUh ^^^^ imitators. I am sure that it was a fine thing 
Imitator ^^^ Holeproof Hosiery that it should be introduced 
to New York City by Samuel Brill, The endorse- 
ment of Samuel Brill, and the splendid advertising he did 
^Printers' Ink, November 23, 1911, p. 60. s 



IGG ADVERTISING AS A BUSINESS FORCE 

for it, gave Holeproof Hosiery a strong and definite standing 
in New York City, and all over the continent. 

If twenty stores had been able to sell Holeproof Hosiery, 
none of them would have been willing to exploit it as Samuel 
Brill did, because it would have been advertising a competitor 
as strongly as itself. 

As to making a men's clothing store the permanent exclusive 
place, for an article of consumption by men, women and chil- 
dren — that is another proposition. A thousand customers a 
day make a magnificent clothing business; and fifty thousand 
would be the fair proportion for the big store. 

This would seem to indicate the wisdom of seeking a broader 
distribution, after the work of introduction had been done, 
and the commodity had made a big reputation in the commu- 
nity. And also after the store had time to get value and credit 
for the effort it had put on the commodity. 

What is good for hosiery is good for shoes, gloves, corsets, 
and similar articles of general manufacture. 

One vital requisite of advertising that sells goods, is to let 
people know where the article can be purchased. Most general 
advertising does not do this. That is why there is so much 
substitution. The advertiser thinks it is enough to say: 
"Sold in all good stores," when only a dozen sell it. It looks 
like clever flattery for the stores that sell his goods; but the 
person in whom the advertisement has aroused casual interest 
would often need a detective to locate the article in a week's 
time — and so advertising results go glimmering. 

This is one strong reason why one store should be used 
for the introduction of an article, for the name of the store 
that sells the commodity is always in evidence. 

Another point. The store advertises in its own columns: 
"The next time you are in Gimbel's let us demonstrate Apollo 
for you . ' ' The advertisement has aroused interest in the Apollo, 
but perhaps it was forgotten; but, the next time that person 
finds herself in Gimbel's, the thought comes: "What was it 
I wanted to see here the next time I came in.? Oh, yes, the 
Apollo." And she goes up to hear it, and the matter is up 
to the salesman. The advertisement has served its whole 
purpose. 

But, if the store's name had not been used, the instrument 
might never have been thought of again — at least not until 
another advertisement had been read. 



NEW TYPES OF RETAILER 167 

The buying of the goods must be made easy for the person 
who reads the advertisement, and the chief point of all is where 
to buy them. Of course, after an article has become so well 
known as to be on general sale, this point assumes less im- 
portance. 

CREATING DEPARTMENT STORE INDIVIDUALITY 

The advertising aspects of the department store in relation 

to national campaigns have been brought out in the articles 

The Local ^^ ^^' Hotchkin. One other phase of the department 

Advertising stores' work in advertising requires attention — that 

o/the^De- '^^ ^^^ local work. This is a huge subject in itself 

pariment and it cannot be more than mentioned here. 

o/e rpj^g small merchant depends upon his own indi- 

viduality, and its expression through personal contact to tie his 
customers to his store. The department store must do the same 
thing on an immense scale and without the element of personal 
service. In other words, the department store is obliged to create 
individuality at wholesale. This is one of the most difficult 
problems of the department store. It is an apparently simple 
matter for a department store to "move goods," but real 
success in department store operation depends not merely on 
keeping goods moving, but involves the necessity of building 
up a large and increasing clientele which, together with the 
casual sales, may enable the store to secure the steady increase 
in business which is necessary for its success. 

Some phases of this problem of creating department-store 
individuality, showing the intimate interrelation between the 
merchandising policy and the publicity methods of such a 
store, are described in an article by Robert Easton of the 
William D. McJunkin Advertising Agency of Chicago: 

* In the largest cities there are three classes of department 
stores: (1) those which consciously cater to people that do 
not "have to count the pennies" — that want the best and are 

*Pnnters' Ink, August 18, 1910, p. 26. 



168 ADVERTISING AS A BUSINESS FORCE 

able to pay for it; (2) those stores which aim at widespread 
popularity and strive to appeal to all sorts and conditions of 
men; (3) those which definitely aim to supply cheap goods for 
people that can afford no other. 

Of course these classes shade into one another. There is 
no sharp dividing line. The "high-toned" store has a base- 
ment supplying the wants of the most thrifty-minded of 
patrons; and all-embracing, "popular" stores have an eye on 
the "fine" trade. In fact, the universal trend among depart- 
ment stores is always upward — toward better goods, higher- 
priced goods. But, to a certain extent, trade of the well-to-do 
gravitates naturally to the stylish, wide-aisled, well-serviced 
store, that of the poor to the "city's bargain centre," while 
plain, ordinary, neither-poor-nor-rich customers just as natur- 
ally turn to the store that is midway between these extremes. 

But the individuality which department stores strive after 
has no reference to this natural classification which a shopper 
makes almost instinctively — certainly after one or two 
shopping trips around town. The individuality aimed at is 
that which characterizes a department store simply as a place 
to trade at, which will draw an increasing volume of trade 
and which will render trade 'permanent. This last consideration 
is of immense importance, for it is less expensive to cater to 
a permanent clientele than to the floating custom of the big 
city, which must be secured by prodigal advertising and inces- 
sant bargain-giving. 

Individuality — if we remember that individuality denotes 

also worthy characteristics as well as different characteristics — 

is a selling force comparable only to that " good name 

Individual- y^ man or woman" which is "the immediate jewel 

^SeUirw ^f their soul." It is not exactly prestige; it is not a 

Force mere reputation for modishness; not simply a syn- 
onym for square-dealing, or efficient merchandising, 
or low-pricing. It is all of these, or any one of these, so im- 
pressed on a woman's mind that she hardly ever is tempted 
to shop anywhere else than at 's. This public knowl- 
edge of a store's individuality is oftenest, nowadays, built up 
by advertising. But it may be due in part, or even wholly, 
to efforts outside of advertising. Yet, however acquired, it is 
a vital and economical selling force. 

The fact that strong, compelling individuality may be known 
otherwise than by advertising is illustrated by the case of 



NEW TYPES OF RETAILER 169 

B. Altman & Co. The reputation of this store was made 
before advertising, not after. And note what an economic force 
it is. A plain announcement by this store — without verbiage, 
imadorned — will sell the goods as surely as an advertisement, 
twice or thrice its size and rendered attractive by all the arts 
of display, proceeding from some other store. This instance 
is quoted not because it is typical of the methods by which 
individuality is usually attained, but because it illustrates 
what an enviable possession it is and what a source of economy. 
In the majority of cases, however, where individuality is 
predicable of a department store it has been the product 
of advertising backed by the goods and the service. 

To the manufacturer the acquisition of a trade-mark is a 

simple matter, though, of course, the value of the trade-mark 

represents the sum of the manufacturer's activities. 

The Store's the excellence of his goods and the extent of their 

"Atmos- puijiic acceptance. But individuality, which is the 

Its Trade- store's trade-mark, is a difficult, a complicated affair. 

Mark No concrete, visible phrase or sign, though exclusively 
used by a store, begins to represent a store's indi- 
viduality. Such phrase or sign may prove helpful, and much 
effort is directed to securing something catchy and impressive 
to serve as a store's slogan. But a moment's reflection 
will show that labeling a store as "The Store of Quality," 
"The Bargain Centre of Busyville," "The Store That 
Saves You Money," and so forth, goes but a little way toward 
creating the individuality which builds up permanent trade. 
But it is in the right direction and will help if only the slogan 
is chosen with reference to the real policy of the store, as 
that policy is revealed in the store's service. 

It is worth repeating that a slogan is valuable only in so 
far as it accords with the nature of the store's service. For 
it is in service that the individuality of a store centres. Indi- 
viduality is that group of impressions inseparably associated 
with a particular store in the minds of those who shop there. 
One shopper's mind may be more deeply impressed with 
one aspect of the service — another's with another. One 

may shop at 's because goods are promptly exchanged; 

another because the clerks are polite; another because one 
always finds what one wants; another because there is no 
misrepresentation of values; another because it is such an 
inviting place to trade at; another because the "best people" 



170 ADVERTISING AS A BUSINESS FORCE 

trade there. And so on. One of these elements, or others 
Hke them, or a mixture of such elements, constitutes individu- 
ality — the something distinctive and good which separates 
one store from its competitors. 

Does advertising create individuality? Yes and no. Yes, 
in so far as advertising is the store's propaganda — the chief 
means by which the store makes its service known to new cus- 
tomers and makes old customers conscious of things that they 
may have only dimly felt and seen. No, in so far as adver- 
tising is utterly inefficient when it is not a perfect mirror 
of store service. 

All department-store advertising is analyzable into two 
elements — news and missionary effort; news of what is 
happening in the store, sales, items, prices; missionary effort 
to make converts and establish the faith of the faithful. These 
two elements correspond roughly to the news and editorial 
columns of a newspaper. And just as in the newspaper the 
news is tinged (if not distorted) by the policy of the newspaper, 
so the sales-and-bargain news of the store is affected by the 
aims and methods of the store's management. 

It is simply ridiculous for the proprietor of a store to tell 

his advertising manager to "give" him advertising of such and 

such a character. The advertising can but "hold the 

The ^ mirror up to nature" — reveal the high or low aims. 

Advertising ^j^^ g^.^^ ^^ vacillating policy of the store management. 

Stock A store with individuality may for a time be mis- 
represented by its advertising. A store without indi- 
viduality may for a time delude the public through its 
advertising into the belief that it possesses individuality. By 
this it is not meant that conscious effort has no value in ad- 
vertising, but, on the whole, advertising unconsciously tends 
to fit the store as a glove fits the hand. Misfit advertising is 
soon thrown into the discard — and sometimes succeeds first 
in throwing the store there. 

In the broad view the efforts of the advertising manager 
are confined to the creation of harmony — harmony between 
the public announcement and the store's individuality. The 
scope of such efforts is wide enough for the most ambitious. 
It embraces, first, an appropriate display form for the adver- 
tising — an appearance which suggests the refinement, the 
dignity, the high standards or the hustling activity of the 
particular store. In this alone there is room enough for the 



NEW TYPES OF RETAILER 171 

exercise of the keenest ingenuity. It includes, second, a style 
and manner of address comporting with the policy and ideals 
of the store. It is concerned, third, with every particular 
statement regarding goods and prices that goes into an adver- 
tisement. When it is remembered that such statements have 
their source in a score or more of men and women managing 
the various departments, it is clear that the advertising manager 
is confronted with a variety of daily problems rendered ex- 
tremely difficult through the necessity for reckoning the 
"personal equation." An advertising manager who achieves 
harmony in the broadest sense of the term deserves well of 
the store. 

It is no depreciation of the value of the advertising manager 
to recognize the truth that the important factor in advertising 
is the "old man" — proprietor, general manager, merchandise 
man — whoever may be the active and real originator of the 
store's policy and the dictator of the lines on which business 
is conducted. The "old man" may be wholly incapable of 
handling the advertising problem — of attaining that harmony 
between service and announcement of service which is the very 
essence of good advertising. He may and does make daily 
blunders in insisting on personal preferences in a sphere in which 
he is not sure-headed through experience. But it is for him to 
decide when harmony is attained by the advertising manager. 

The reason why there is much poor advertising of department 
stores is not that advertising talent is difficult to procure. 
It is due to the fact that so many department-store managers 
have nothing but a "hand-to-mouth" policy, no conception of 
true principles of merchandising, no ideal of public service, 
and obstinately cling to the superstition that advertising can 
W'Ork miracles, can achieve results entirely unrelated to what 
is going on "behind the scenes." 

ADVERTISING ASPECTS OF THE CHAIN STORE 

The chain-store movement is of even more recent origin 
than the department-store development in the United States, 
and is even more meagrely supplied with reliable data which 
are generally available. Many of the chain stores have worked 
out data for their own use, but these have not yet become 
public property. 



172 ADVERTISING AS A BUSINESS FORCE 

The chain store, in brief, aims to secure all of the buying 

advantages of a large scale retailer (such as a department store) , 

and to retain at the same time all of the selling 

of tiiT^ advantages involved in the personal contact between 

Chain the retailer and the consumer, as well as the advan- 

tages which may be secured by concentrating and 

departmentizing the common functions of the retail concerns. 

The way in which these two objects are attained by a chain store 

is well illustrated in the outline of the methods of operation 

of the United Cigar Stores as they are described by George J. 

Whelan, who has been the leading spirit in this organization 

since its inception. 

. . . . * We started in 1901 with one store in Syracuse, 
N. Y. We have to-day some thousand stores scattered over 
every section of the country except the South or Southeast. 

The growth of this chain of retail stores is the record of a 
tendency in retail trade which was anticipated in some other 
lines and must be repeated in all lines until the whole machinery 
of distribution is readjusted to the demands of the times. 

The change was as natural and inevitable as the change in 
production from hand- tool to power-machinery. The reorgani- 
zation of production has been going on for years, but the 
reorganization of distribution is just beginning. Both proc- 
esses are naturally attended by some unpleasant results, 
but this is not the fault of the machinery. It had to come 
because it is a higher economy. 

The idea that we had back in Syracuse was a very simple 
one. The retail business at that time was falling to pieces. 
There were no retail cigar stores, or next to none. They 
were all going into the hotels, cafes and clubs on one hand and 
turning into news stands on the other. 

There was no service to speak of, nothing done to attract 
business and keep it. The manufacturer and the consumer 
did all the work. The manufacturer put the cigars, cigarettes, 
and tobacco there and the consumer came and took them 
away. ... 

The application of the ideas we held to our business in Syra- 

*Printers Ink, December 14, 1911, p. 3. 



NEW TYPES OF RETAILER 173 

cuse revolutionized it. We opened up a second store in Elmira 

and tried the ideas out there. They worked out the same 

every time. W^e added other stores. Always the 

The United game story. By this time I was running the factory 

llethodr ^"^^ ^^^ taking general charge of the business. 

Before long we had forty stores in the chain and 
had spread into other states. The original conception had 
grown. It was now a large undertaking, too big for a small 
company. We moved our headquarters down to New York 
City and started negotiations with the American Tobacco 
Company for capital and trade connections. The deal hung 
fire for a year or two and then it went through. We reor- 
ganized the company on a larger scale, took over the twenty 
retail connections of the American company throughout the 
country and started on a new climb upward. 

* . . . . We started out to give the consumer the 
best we dared to give him. Everything was aimed to please him 
— not as a philanthropy, but for business. We picked sites 
for our stores where the greatest number of consumers could 
find us; we made the stores attractive inside and out; we stocked 
them with the best goods we could buy at the lowest prices; 
we trained our clerks in courtesy and service; we devised 
window trims to catch the eye; we prepared advertising, dis- 
tributed premiums, and worked special schemes. And then 
on top of that we provided a scheme by which these details 
should be taken care of automatically and automatically 
improved. We devised a system and set a system to icatch it. 

We do not have the kind of system that gets in the way and 
absorbs the attention of the heads of the business. Ours is a 
system that does away with unnecessary thinking and planning. 
Every detail that can be is systematized. 

I can sit here in the office and ask how many boxes of " Sweet 
Caporal" cigarettes does such and such a store out in Seattle 
have in stock, or how many did he sell last month, or the 
corresponding month in 1910 or 1909, and in two minutes I 
can find out. I can get the information while the train of 
thought that prompted the question is fresh in my mind. 
I don't have to write out to Seattle or wire out. It is here. 

And the information costs next to nothing to get. It 
comes out of the monthly audit and daily reports. 



*Pnnters Ink, December 21, 1911, p. 26. 



174 ADVERTISING AS A BUSINESS FORCE 

Our business is largely built on reports. We want reports 

for two reasons. First, for our own protection, to keep track 

of the stock and the sales in the many hundred 

"^HYd^^ stores, to trace leaks, prevent them, and, in general, 

voHs" train the clerks in our widely separated locations to 
habits of accuracy and honesty. Second, we want 
reports so as to help the sales by showing us the reason for 
every condition, good or bad, in the whole country. With 
that information we can immediately take steps to correct 
the bad condition or extend the good. 

We have a system that shows us all that, and we have another 
system that immediately makes use of the material. It is 
elaborate and calls for a great many clerks and accountants, 
but the net result is simplicity, and it goes like clockwork. 

It has made the work of every department head much 
easier. We have been able to turn from guesswork and office 
drudgery to clean-cut facts and figures. The time we used 
to spend on guessing and verifying and experimenting we 
can now put on sales development. And sales development 
means almost wholly a question of taking notice of the weak 
spots revealed by the reports and applying locally the methods 
which have proved of value in other places. 

Our knowledge of all these things is a matter of certainty. We 
know that if certain things are done the result will be satis- 
factory and certain. The important thing for the officers to 
do is to see that these other things are done, I do not per- 
sonally need to know a lot of details about the business. 
Practically the only thing I am doing in the company to-day 
is to take care of anything that comes up in the legal depart- 
ment, or to harmonize differences and keep things running 
smoothly. If two men have any differences they come to 
me to settle them. That is part of our policy and system. 
And before they hear my decision they must agree to be 
friends after that. 

I don't want to know the details. I can trust others to 
attend to that. I want to see things broadly, and so I have 
arranged that every regular report, by the time it gets to me, 
is simplified to a single figure. 

All of our reports are by percentages. I do not care whether 
a store costs $6,000 or $16,000 a year. All I want to know is 
what the percentage is on every dollar we take in. I look 
at Kansas City, for instance, and see that it costs us 8 per 



NEW TYPES OF RETAILER 175 

cent. rent. That is too high, so we find out how we can remedy 

it. We take an inventory of our business every day. We carry 

about $1,000,000 worth of stuff. It was $1,300,000 at the last 

figures. I have a book in which I can see at any 

Knowing moment just how the business stands. This book 

Business contains a hst of heads, such as "gross sales," "rent," 

Stands "miscellaneous wages," "cost of lighting stores," 
"miscellaneous expenses," "money spent in schemes 
over which the store has no control," such as special advertis- 
ing campaign, etc. 

Every dollar that comes in must carry against it a charge. 
Two per cent., for example, is charged against every store 
for the advertising fund, and the men who think they can 
turn that 2 per cent, into a profit for themselves by not 
advertising are fooled; it is charged against them anyway. 

So that is the first thing — exact knowledge as to where 
we stand every day of the year. I do not know whether we 
have carried our system any farther than some other big 
concerns, but I do know or believe that 95 per cent, of the 
retail shopkeepers do not know mucTi about their business. 
I believe that fully 50 per cent, do not take an inventory once 
a year. We have formal inventories taken by men sent out 
from the home office twelve times a year, arranged at irregular 
and unexpected times, and we have daily reports of sales. 

Yearly inventories wouldn't be of any use to us — or half- 
yearly or quarterly. Too much can happen in three months. 
We want to know what is wrong before anybody else knows it. 

Here is where most business is wrong. Most retailers do 
not know what they are doing. Business men tell me about 
the amount of things in stores. They say people are hard 
up and do not buy. I do not believe that at all. 

The trouble is that the average merchant is buying and 
selling on a wrong basis. He buys as long as his money lasts 
and then tries to sell his goods at a relatively large profit. 
If he has $3,000 in the bank he buys goods with it, and keeps 
his goods until he gets his profit or needs the money. 

I believe in doing a lot of business on a small margin 
The Cigar qJ profit. If I were in the egg business, instead 

SeUinq ^^ doing as a lot of dealers do — buy eggs in June 

Policy or July and wait to sell them at a high per cent. 

profit when the prices go way up — I would sell 

them as soon as I could at a 6 per cent, margin of profit. 



176 ADVERTISING AS A BUSINESS FORCE 

I would make more money than the man who buys at 18 

cents and waits until the price of eggs is 38 cents. I would 
be selling so many more eggs and I would be building a 
business. I would probably sell a hundred times as many eggs 
on the smaller margin of profit as the other fellow sells at a 
larger profit. 

Now, in our own line: Suppose you can make a certain 
cigar from $35 a thousand up. When you get to above $35 
the average manufacturer jumps to $50. Now we go $2 
at a time or $10 at a time, according to the cigars, not merely 
to sell cheaply, but so as to make a quick turnover. That 
is the main thing. 

Our trade is different from the department store, for instance, 
in that if the department store sells one thing very cheaply 
and loses on it, it makes it up on another line, whereas if 
we sell our goods at a loss we cannot make up on any other 
line. 

Suppose we buy a job lot of cigars worth $100 for $50, 
they would have to be sold to bring $60. Quick repeating 
is better than slow profits. 

The average drug store sells its own goods at a higher profit 
than it does patent medicines. It sells patent medicines at 
cost and makes 10 per cent. Then it puts up a remedy of its 
own and makes a big profit on it. 

The United practice is just the opposite. We make less 
money on private brands than on public brands. Our private 
brands are of greater value than the public brand. 

A package of cigarettes that we sell for 10 cents should 
represent a higher grade brand than a public brand sold at 
10 cents. If the man happens to like the cigarette, he must 
com^ back to us because he can't get it at any other place. 

Ninety per cent, of the dealers let other people's ideas run 

their business. Ninety per cent, of the dealers are governed 

by the people who trade with them. We run our 

An Aver- business instead of letting other people do it. 

Business "^^^ business of the average retail cigar store is 

about $30 a day. Our retail business is about $150 

a day. That is the difference between the two methods of 

doing business. 

The result of the systematic way in which we tried to handle 
our business is that we began early to devise ways and means 
of utilizing the mass of information poured in by the reports. 



NEW TYPES OF RETAILER 177 

We brought the heads of departments together in weekly 
conferences. These are no formal and perfunctory affairs 
with us. They are essential to the business. In the conference 
I have only one vote. I may propose suggestions, but they will 
not go through on that account. 

I claim, for instance, that our customers do not cut the 
end of the cigar off right, but I have not been able to make the 
people in this office understand that. For six months I have 
been trying to get them to see that if the cigar were cut off 
in a V-shape instead of straight across it would taste better 
and be a better smoking cigar. I know that it is true, but I 
do not try to railroad it through because free discussion and 
independence of judgment is worth more to the business than 
the adoption of any one scheme. 

I put one of these schemes up to our people and back it 
and get them to take it in hand. Then in a few days or a week, 
I take the opposite side. I am the first one to get after it. 
If I put a plan up for operating the business and then do 
not take an opposite end, they are apt to continue it for the 
sake of not hurting my feelings, although perhaps they do 
not think it a good scheme. If the men go against it I back 
it again until the possibilities are all threshed out. 

The execution of all these ideas and suggestions is carried 
out by several departments, which in some cases are subsidiary 
companies, the United Stores Realty Company, for instance. 

When we have determined to enter a city or territory, 
the realty company goes ahead and picks out the site or sites 
for stores. We look for the places where men most 
Entering congregate. They generally are corners. Investi- 
Territory gators carefully check off the traffic for days at a 
time in various parts of the city until we know abso- 
lutely the most desirable locations. 

Sometimes we cannot get the locations at any reasonable 
rent, or at all. Then we take the nearest location and wait 
our time. It often turns out that the best thing we can do 
is to buy or lease the whole building. In this way we often 
get the site we want without rent, because the store space 
required is so small that the rent of the other tenants makes 
up the difference. 

Our stores are compact. They are arranged on the principle 
of supplying the customer in the shortest possible time. Prac- 
tically everything asked for is within the clerk's reach. Every 



178 ADVERTISING AS A BUSINESS FORCE 

inch of space beyond that is waste, and worse than waste — 
it is in the way. 

After the site has been secured the furnishing department 
follows on and puts in the equipment, which is uniform in 
every store in the country. 

After it goes the supply department, which automatically 
stocks the goods. 

Then the sales department takes hold, assigns the men and, 
fits them into the system. 

The window display department now gets under way, and 
last of all, the auditing department begins to check up. 

All of the reports from all of these departments come into 
our headquarters, here in New York, are worked over by the 
auditing department of 250 persons and are boiled down to 
percentages that tell us at a glance how everything is going 
in every part of the field. 

All these things are vital to the sales department. They 
lift the burden off it. A good deal of what in another business 
would be the wear and tear of selling is removed at one stroke 
from that department and distributed among other depart- 
ments, where it becomes mere routine, always under control 
and always tending toward improvement. 

For instance, if the goods are good and fair-priced, the store 
interior pleasing, the window trim attractive, the advertising 
sensible, and the clerks courteous, trade will gravitate our 
way naturally. The only way to make it move faster is to 
improve the goods, service, advertising, window trim, etc. 
It is not a matter of what some would call "salesmanship," 
except in so far as this is a matter of attention to details. 

* With us the extension of territory offers no problem 
for the sales department to worry over. It is taken care of 
almost automatically. Our realty company's business is to 
know what territories, what cities, and what sites in the cities 
are desirable. It is its sole business to determine this, secure 
the sites, and of course manage the property bought or leased, 
in the best way. 

One thing that lifts a big burden off the sales department 
and offers a tremendous inducement to the customers to buy 
is the premium department. This is one of the features of the 
business. We give away annually some $2,500,000 worth of 



♦December 28, 1911, p. 3. 



NEW TYPES OF RETAILER 179 

merchandise, at retail prices, which are about double what 
they cost us. 

When we started the premium plan we gave these certificates 

to people who paid us cash and did not give them to people 

who took our goods on credit. After a while we 

Taking abolished the whole credit system and gave them to 
i^'^I'Oads everybody. We found the premium idea was too 

Selling valuable to put any limit on. We found this out 

Force before the customers did. If we did not force the 
clerk to force the consumer to take the certificate, 
not 50 per cent, of the certificates would be taken. 

Our clerks are instructed not to lay the certificates down on 
the case, but to put them in the customer's hands. 

Our reason for insisting on this is a double one. In the 
first place, the premium is not really a gift, as it seems to be. 
It is something our patron really pays for, according to our 
analysis, although he would not get it if we did not put it in 
the plan. Instead of giving him the extra cent or two, we 
give him the certificate. 

These pennies make up a million dollars or more annually, 
and through the greater purchasing power of this money in 
the mass we are enabled to buy the merchandise the consumer 
wants (or what is more true, that his women-folk want) at 
half the price he would have to pay for it elsewhere. . . 

Still another load is taken off the sales department by the 
organization of the window trimming. It is another of the 
methods of automatically adding selling power to the store. 
In the same way that the other elements of the business are 
handled, the planning of window display is centralized in the 
home office and goes on regularly and methodically. 

And so on with the other features. Just so far and so fast 
as they can be systemized we do it, concentrating upon one 
thing after another and working each of them out to a finish. 

Such a policy apparently does not leave much room for 
individual initiative, but it does just the same. We have 
standardized our methods, but it always remains to lift the 
standard. We have labored with our clerks, but there are 
still many who do not yet appreciate the importance of unfailing 
courtesy and cheerfulness. 

We can increase the intelligence of the men by increasing 
their knowledge of the business. We try to improve their 
physical well-being by providing medical attention for them. 



180 ADVERTISING AS A BUSINESS FORCE 

Even their feet are looked after, because a clerk with aching 
feet is not at his best and cannot do justice to his work. That 
is our business and we look after it. 

But the great inducement a clerk has to do his best is that 
he is to a certain extent a partner in the business. Each head 
clerk receives a certain percentage of the receipts for his share 
of the business, and each clerk under him receives a salary 
based upon what he sells. His salary depends upon himself 
and he knows it. And the satisfactory way in which this 
works out is shown by the fact that a large proportion of our 
clerks stick to us. . . . 

Coming back to the store — we do not sell outside our own 
stores and we have only one price. We do not believe in any 
price regulations or in any combinations with competitors. 

On the other hand, we do not and cannot control trade- 
marked brands. Suppose we went to work and took a man's 
goods and wanted to sell them at six cents, when all the other 
dealers sold them at ten cents. We couldn't do it. We are 
afraid to do it. What we do is to take the same cigar and put 
on another name and sell it at a lower price. 

We handle all the brands that sell, no matter who makes 
them. The American Tobacco Company might have pre- 
ferred that we sell only its brands, but it could well have 
afforded to subsidize us to display other goods. Suppose it 
got 80 per cent, of the business, it could afford to have us display 
the opposition goods in its windows for the benefit it is in 
creating business. . . . 

Some of our patrons who buy our cigars by the box, and 
some of our clerks who like to sell them that way, sometimes 
feel that the United is wrong in its policy of one price for a 
cigar, single or in quantity. The man who buys in quantity 
feels he ought to get a special quantity price, and perhaps 
thinks that we are taking advantage of him, and that our 
boasted service breaks down under that test. 

As a matter of fact, that very one-price is a vindication of 

the service. The saving which the purchaser of a box would 

have effected is spread over the whole brand, and 

Quantity every smoker gets his share of it. And, as the man 

the^lJnited ^^^ buys two or three cigars at a time outnumbers 

Stores the purchaser by the box fifty to one, it is not only 

justice but good business. Thus, in a large number of 

instances, the usual selling practice is the opposite of sound 



NEW TYPES OF RETAILER 181 

business and will not bear examination. The correction of just 
a few of these little errors in a business might be enough to 
change failure into success. It pays to take a lot of trouble 
where a customer is concerned. 

One of our patrons, for instance, wrote us one day that he 
liked a certain brand of cigar but did not like the shape in 
which it was sold. He wanted to know if it were not possible 
to make it more in the shape of the panetela. This was the 
request of just one man out of millions of our patrons, but 
we did not consider that it wa^ too trivial for us to consider. 
We had the cigar made up in the desired shape and notified 
our correspondent when and where he couU obtain it. The 
effect of that action on the customer is not the only thing 
to be considered; there was the effect on the clerks and on the 
office. 

Like all other retail merchants, we have sensational prob- 
lems to meet. During the holiday season, for instance, our 
stores would be jammed during the last few days and we would 
miss many sales as well as afford an imperfect service, if we 
did not take some means to spread the interest over two or 
three weeks instead of allowing it to be concentrated on the 
last days. So we anticipated the Christmas rush by making 
unusual offers. We do not cut prices, but include other things 
in the price. 

Take the result of this for just one day, Saturday, December 

11, last. On that day we did a record business in our thousand 

or so stores of $410,759, an increase of 23 per cent. 

I fo' ^^^^ ^^^ same day last year. That is an increase of 

Day's $125 in business for each store over last year. 
Business The biggest business done by any store was $11,667 
— by a store in New York City. The largest indi- 
vidual sale was $2,300, made by a salesman in the store at the 
head of Wall Street on Broadway, New York. 

January and February are poor months for selling cigars. 
Smokers do not enjoy smoking out of doors then so much as 
in other months. They are also loaded up with cigars after 
Christmas. So we have to resort to schemes to keep up the 
average. 

Last January, for example, to every purchaser of a pipe 
we gave one half the amount of his purchase in anything in 
the shop. Another time, we ran a pipe clean-up sale, which 
was very effective. 



182 ADVERTISING AS A BUSINESS FORCE 

The special sales give us an opportunity to put news value 
into our advertising. Ordinarily the advertising has to be in 
the nature of a daily reminder — our name, shield, trade-mark 
and a few words in plain type, made to stick out from the page 
by the use of plenty of white space. When we have news to 
tell we use more words. 

We believe the principles on which the United Cigar Stores 
are conducted are bound to prevail and, consequently, that 
business conducted on any other basis wall have to reform or 
go out of existence. But we are very far from being a monopoly, 
fast as our chain is growing. There are 12,000 retail cigar 
stores in New York City and we have only 300 of them, and, 
though we do a very large proportionate share of the business, 
it is still only 25 or 30 per cent, of the whole. Outside of 
New York, of course, our share of the total business is very 
much less. 

Moreover (and this is worth while considering), our methods 
have lifted the retail cigar business all along the line. When 
we began, our methods were revolutionary. To-day it is 
possible to find a great many independent stores which, per- 
haps, are just as attractive as ours. The whole tone is higher. 
You will often notice ladies accompanying their husbands into 
our cigar stores. That was an unheard of thing in the old 
days, and the change is something we take credit for. 

This description of the methods and organization of the 
United Cigar Stores has been reproduced at length because 
this chain has gone as far as any in grasping the buying and 
selling possibilities of the chain-store idea. 

Its significance to the advertising man lies chiefly in its 
suggestions of future possibilities. If a chain of grocery stores 
should do for the grocery business of St. Louis, for instance, 
what the United Cigar Stores have done for the cigar trade of 
a number of cities, and if the St. Louis success should be repeated 
in a half dozen cities, the business of advertising groceries in 
those places would be revolutionized in a very short time. 
And this is not altogether prophetic. 

The chain-store idea is extending rapidly through the United 
States, being particularly successful in such lines as groceries 



NEW TYPES OF RETAILERS 183 

and drugs, or similar lines where the unit of sale is small and 
where most of the products handled are for personal consump- 
tion. The extension of this movement is thus described by 
S. C. Lambert, who begins his discussion by quoting H. S. 
Collins, Vice-President of the United Cigar Stores Company: 

* . . . . "The chain store in America is no man's in- 
vention," continues Mr. Collins. " It is an inevitable outgrowth 
of economic conditions. It was made possible by the 
'^f'f/^y^^ development of the telegraph, the railroads, the mail, 
"'Store Idea ''^^^^ ^^^ ^^^^ other influences which have made the 
United States one community instead of half a 
hundred. A hundred years ago it would have been imprac- 
ticable for any manufacturer to have a number of retail outlets 
scattered in various parts of the land. A proper control of 
them would have been frustrated by the segregating factors of 
distance, of lack of quick communication and of quick shipments. 

"But note what took place when the territory of Great 
Britain became knit together into one trade unit. What we 
call chain stores sprang up there, and were in successful opera- 
tion long before a truly national chain was possible in the 
vastly larger domain of the United States. Boots, Limited, 
has been operating over 500 drug stores in the United Kingdom. 
Sir Thomas Lipton has had 3,000 or so coffee stores. The 
Imperial Tobacco Company has been selling through retail 
outlets all over the United Kingdom for years. Germany 
can show similar examples. 

"When the physical conditions were right for the chain 
stores in the United States they inevitably began to grow. 
The old methods of distribution and selling were inconvenient 
and unprofitable to the manufacturer or importer, and costly 
to the consumer. Speaking of the United States, we are able 
through our chain to dispose of goods with greater dispatch 
and less cost to us, and, therefore, to give the consumer fresher 
tobacco at lower prices. We save the intermediate cost of 
handling, and depend for our sales upon the volume of business. 
Being compelled to rely upon volume, we have had to develop 
a United sale spirit of efficiency and courtesy to secure this 
volume. 



"Printer^ Ink, June 16, 1910, p. 3. 



184 ADVERTISING AS A BUSINESS FORCE 

"While the United States was not the first to see the 
establishment of a chain of stores, I believe that in this country 
will be the greatest development of the idea. The rapid 
growth of population, accompanying an increasing solidarity 
of the fields of trade, gives me reason to anticipate a linking 
up of 'chains' in many other lines of merchandise." . . . 

Mr. Lambert discussing the spread of the chain-store idea 

says: 

The plans for a number of grocery and drug store chains 
are now familiar to many, and it is inconceivable that more 
will not follow. There are preparations on foot for a chain 
of stores as outlets for a line of ready-made clothes for men. 
Similar stores for lines of trade-marked suits for women are 
sure to come, for even now fashionable modistes selling gowns 
for women operate shops in half a dozen cities, and only lack 
capital for starting more branches. 

Shoe manufacturers, like Regal, Hanan, Hanover, etc., have 
already plentifully demonstrated the strength of the store 
chain. Only sufficient capital and organization prevent many 
present chains from enlarging very much more. As the type- 
writer and sewing machine companies have learned, it takes 
a lot of money and a powerful, able organization to maintain 
a system of hundreds of branches; but not one of them but is 
certain that it is the only forceful method of distribution. To 
them the suggestion to turn their machines over to retailers on 
the present plan of the large volume of hardware, drugs and 
groceries, etc., is entirely impossible. They know the supreme 
importance of controlling their own outlets — and their wisdom 
is permeating rapidly into every sort of merchandising. 

*Because the United Cigar Stores chain came into being 
full-blown, as it were, it has not had to face the difficulties 
confronting some other concerns which are now developing 
a similar system. Many manufacturers who some day will 
be operating a number of co-ordinate stores in various cities 
are now selling through special representatives or exclusive 
agencies. To take full advantage of the chain-store idea 
they must, one would hazard, gradually abandon the present 
system. And this means complications. 

*Pnnters' Ink, June 23, 1910, p. 16. 



NEW TYPES OF RETAILER 185 

Huyler, the New York candy manufacturer, is in this stage 
of transition. He has been a national advertiser for years. 
He has established scores of exclusive agencies in order to 
realize the profits of his advertising. In the course of time 
the retail man handling Huyler's, along with other goods, has 
come to place a high value upon this line. He has often 
worked faithfully to build business for Huyler's; he has lent 
a hand, more or less willing, to place the goods in the neighbor- 
hood. The chain-store development he possibly regards as 
detrimental to the future of his exclusive agency business. 

As for the company, it cannot at once abandon its agencies 
for special stores. The temporary relaxation of business and 
the drain upon finances incident to building quickly a complete 
chain forbid this. Growth into the new scheme of retailing, 
therefore, raises some very nice questions of policy. 

Huyler's exclusive agencies are thoroughly alive to the 
branch-store trend. They have watched one store after another 
open to sell only Huyler's products. Some of them have been 
intelligent enough to ask what bearing Huyler's development 
of about two new stores a year will have upon their Huyler 
business. Inevitably they are wondering if they are going 
to be crowded off the boards as far as handling Huyler's is 
concerned. 

To meet such a state of mind the manufacturer has spread 
the news among them that he will not open a store in a neigh- 
borhood in which an agent now satisfactorily operates. 
The Huyler j^ is well known in trade circles in New York that 

System Huyler has refused to open a store opposite the Grand 
Central Station in New York, although more than once 
he has been offered an ideal place. His statement has been 
that he is well represented there by an agent who is heartily 
pushing candy sales, and that it is his policy not to sweep to 
one side a representative who for a period of years has effi- 
ciently built up business. 

Judging from the stores that the Huyler Company has 
already opened in various cities, it seems to be the policy 
to open a chain store only in new parts of growing towns, 
w^here there is no special agency. One is bound to speculate 
whether the exclusive agency and the chain store, offshoots of 
the same concern, can indefinitely run along side by side. 
Perhaps the Huyler company will succeed in making these two 
methods of retailing dwell in peace and unimpaired value 



186 ADVERTISING AS A BUSINESS FORCE 

together in the same town. At any rate, not only the trade, 
but also other manufacturers facing similar conditions are 
keenly interested in watching to see how the endeavor turns 
out. 

Browning, King & Co., of New York and fifteen other cities, 

are a simon-pure example of a growth of a chain from a single 

store. Nowhere along the line has development been 

The attended by exclusive agencies. This company man- 

Brmiming ufactures men's clothes and sells them through its 

Cl"t^of °^^ stores, making its argument to the public on the 

Clothing basis of maker-to-user economy. One recent adver- 
Stores tisement had a paragraph arguing that because the 
company was both a manufacturer and a retailer at 
once, it could furnish garments at a saving of from a quarter 
to a third. Consumers are also told of the buying ability 
of the house. With seventeen stores in fifteen cities it is 
able to secure good discounts on both materials and other 
items like insurance. It is roughly estimated that such dis- 
counts amount to a yearly total of $75,000 to $100,000 — 
representing that much net margin within which to meet compe- 
tition on an equal basis. 

The chain-store proposition has a peculiar merit in a business 
like that of clothing. The manufacturer is able to control 
his output almost absolutely; that means that as a retailer he 
is able to avoid being "short" or "long" on any line. Trade 
demands are carefully calculated in advance and orders placed 
accordingly. If a line "goes" more quickly than expected a 
special order is hurried through the shops on a special schedule. 
With both the field of manufacturing and retailing under its 
eye the company is able to trim its sails quickly. In this case 
the manufacturer does not unload upon the retailer, as some- 
times happens to an independent retailer whose judgment 
in buying is formed from meagre facts in his narrow field. 

For a concern that is credited with being the first to operate 

a large chain of stores in this country, the Great Atlantic and 

Pacific Tea Company has been making very little 

Atlantic noise. It began to expand in 1859 and has been 
°^g^ (i^-^^ growing rapidly, until to-day the number of stores 
is 360. 

One of its officers expressed himself as follows: "The idea 
in the beginning was a bold one. It struck at the very founda- 
tion of the routine traffic of the middleman. We have never 



NEW TYPES OF RETAILER 187 

lost faith in the principle that the nearer the producer and the 
consumer can be brought together by avoiding all intermediate 
transfers, the better will it be for both producer and consumer. 
One hundred exchanges can add nothing to the real value 
of an article, although it may add many hundred per cent, 
to the price. 

" We are growing at the rate of one store a week. Our cus- 
tomers comprise nearly 4,000,000 individuals. Our individual 
sales number 125,000,000 a year. We import our teas and coffees 
by the ship load; we buy the crops of an entire countryside." 

The first thing that a manufacturer with chain-store ambi- 
tions is apt to ask himself is: "Where can I best open stores; 
and if I desire more than one in a city, how can I find 
Selecting q^^ jJ^q l3Pg|^ places.?" Scientific analysis of this 

C^mm niatter is now made. 

Stores Except in the South the United Cigar Stores Com- 
pany is operating stores in most of the large cities. If 
it decides to go into a new town, that town is selected upon 
the basis of population and general business health. George J. 
Whelan, president, has collected figures showing the cigar-buy- 
ing ability of different centres. In his statement he says that 
the per capita buying power of New York is $1.74 a year; 
Chicago, 63 cents; St. Louis, $1.21; Rochester, 99 cents; 
Spokane, 60 cents; San Francisco, $4.06; Milwaukee, 22 cents; 
Atlantic City, $2.55. 

These data are valuable in determining not only what town 
to enter, but also how much of the business the company is 
securing if it has a store in a town. 

In selecting a new site, men are placed at corners or at mid- 
block stations, if no corner is available, to count the number of 
persons who pass in a day. A steady stream through the 
day is figured as better for a prospective store than a much 
larger crowd that takes the form of a noonday rush or a home- 
ward bound jam. 

Thus far the drygoods business has shown little tendency 
to adopt the chain-store idea. It is argued in that trade that 
there are many factors which make a department-store form of 
organization more satisfactory than the chain-store form. 
Mr, Lambert seems to think he sees a drift toward chain stores 
even in drygoods. 



188 ADVERTISING AS A BUSINESS FORCE 

*One finds himself in a curious maze of cross currents when 
he tries to ascertain whether or not there is a tendency to 
chain-store growth in the drygoods field. It is a conflict of 
interpretation of developments rather than any uncertainty in 
working out of drygoods selling policies. 

The outside observer, after an examination of the leading 
facts in the retail drygoods business, would be inclined to 
assert without hesitation that evidences indicate a progress 
toward an extension of retail outlets. Most impressive is the 
rapid growth of the H. B. Claflin Company, of New York. 
This concern is the wholesale branch of the Associated Mer- 
chants Company, which is controlled in turn by the United 
Drygoods Company, with a capital of $51,000,000. But inas- 
much as John Claflin, president of the H. B. Claflin Company, 
is a dominant factor in the Associated Merchants Company, 
the Claflin interests are generally considered as being in control 
of the system of drygoods stores that covers the East. 

Some men who are so well informed about drygoods that 

they are everywhere rated as authorities seem disposed to turn 

their heads away from the significance of the Claflin 

The CAain- activities. Even the recent taking over of Lord & 

Store Idea 'faylor, and the more recent acquisition of the Tefl^t- 

Drygoods Weller Company, with a capital of $3,000,000, by the 

Trade H. B. Claflin Company, have not served to alter the 
opinion entertained by the authorities referred to 
that the drygoods business is, by reason of its peculiar nature, 
exempt from the chain-store plan. 

Are these men so close to their proposition that they haven't 
a proper perspective of the situation? It is interesting to 
inquire whether the investigating layman is right in his idea 
that such is the case. 

Those who maintain that there is and has been for two or 
three years a rapid branching out which is essentially an adop- 
tion of the chain-store plan have some convincing facts at 
hand. In the first place the H. B. Claflin interests control, 
besides Lord & Taylor and the Tefft-Weller companies, the 
following large retail establishments: The James McCreery 
Company, with Twenty-third and Thirty-fourth street stores; 
Stewart & Co., of Baltimore (formerly Posner Brothers); 
$300,000 of the $250,000 common stock of the C. G. Gunther's 



*Pnnters Ink, July 21, 1910, p. 32. 



NEW TYPES OF RETAILER 189 

Sons, furriers, New York; J. N. Adam & Co., of Buffalo; 
$2,400,000 of the $3,000,000 income bonds and 800 of the 
1,000 shares of the O'Neill- Adams Company (formerly H. 
O'Neill & Co., and the Adams Drygoods Company); Hahne 
&: Co., of Newark; the Powers Mercantile Company, of Minne- 
apolis; the William Hengerer Company, of Buffalo, and the 
Stewart Drygoods Company, of Louisville. 

Then, besides, there are the two great stores of Wanamaker 
in New York and Philadelphia; the Gimbel stores in Phila- 
delphia, Milwaukee, and now New York; the May stores in 
St. Louis and Cleveland, and a number of other drygoods 
retail concerns which operate stores in their "home" town 
and two or three other places relatively near by — an interesting 
example of which is the Dives, Pomeroy & Stewart string of 
stores in Reading, Harrisburg, Altoona, Pottstown, Pa., 
Chattanooga, Tenn., etc. 

It will not do to argue that these are not indications of a 
chain-store trend merely because they are not in all cases 
bound together with one and the same name, like the United 
Cigar Stores Company. They are controlled by the same 
minds and operated harmoniously to bring about the chief 
interests of their promoter. Through them may be marketed 
stocks bought perhaps at a bargain. In them may be working 
out the same policies of retail selling. The "Famous," of St. 
Louis, and the May Store, of Cleveland, are no less a unit 
because they bear different titles. 

On the other hand, what is the argument of those who say 
that the chain-store system has no vital part to play in the 
selling of drygoods.? The composite opinion of those men 
whose views are considered weighty is practically this: The 
retail drygoods business won't stand the planing down 
necessary to the chain-store operation. It is peculiarly a 
business in which personality is necessary. A store as large 
as the largest may be operating on, say, State Street, Chicago. 
A smaller establishment just above on the corner has a pro- 
prietor on the spot whose tastes are most discriminating, whose 
anticipations of feminine choice are unfailingly accurate, whose 
skill in the display of goods is refined and unfailingly tempting. 
By so impressing these personal qualifications upon his store 
he may easily pull much of the best trade away from his big 
competitor, whose operations are mechanically gauged from 
the distant home office and whose store service would perhaps 



190 ADVERTISING AS A BUSINESS FORCE 

lack the finishing satisfactory touch which the presence and 
oversight of the proprietor alone can give. 

In a word, it is difficult to standardize the drygoods business. 
A store which may be brilliantly successful on Fifth Avenue, 
New York, would fizzle dismally on Washington Street, Boston. 
The two publics are radically different in tastes. The policy 
that built an envious success in New York would meet its 
Waterloo in the "Hub." 

And so on through the country. No two cities are exactly 
similar in temperament and buying disposition. It is urged 
that a rigid system would be fatal if inaugurated in a chain 
of retail drygoods stores in Buffalo, St. Louis, Louisville and 
Minneapolis. 

One of the gentlemen who was most pronounced in his 

assertion that the chain-store plan was no more than a bogy, 

as far as drygoods were concerned, recalled the ex- 

Wfiy perience of a " merchant prince " of New York, who 

Chains of j^^g since acquired an interest in two or three other 

Stores Have^^^S^ department stores. This man made his repu- 

Trouhles tation in lower Sixth Avenue, New York. He had 

had a hand in founding a mammoth store in Chicago. 

He made up his mind to open an establishment for the "elite" 

in Chicago. He did so. His name was over the door. And, 

according to reports, this is what happened: A woman would 

shop through the older store in Chicago. She would wander 

over to the "elite" emporium, see the display, notice the 

name on the store, and say: "Oh, there is no use in going 

in here. It is Blank's store, and we have just been in his other 

one. Let's go over to Marshall Field's — he's got an entirely 

different line of goods." 

The ambitious merchant had so closely identified his name 
with one grade of store service and merchandising that he was 
literally iron-bound when he attempted to soar to a higher 
retail condition. 

And here was another "clincher" that was adduced by 
"the negative": "Do you think that a merchant from the 
lower Sixth Avenue is temperamentally able to operate in a 
way that would be most desirable on Fifth Avenue, New York, 
above Thirtieth Street? Do you think that he could bring 
himself to pay $10,000 a year to some Beau Brummcl to 
stand about and do nothing except to put out a highly mani- 
cured hand to the lady who came from upper Fifth Avenue 



NEW TYPES OF RETAILER 191 

and greet her graciously? I believe that he would chew his mous- 
tache in his office a while, finally kick himself for maintaining 
such 'useless' flummery and discharge his faultless mannered 
and specklessly groomed reception man. He would abolish 
those refinements that would be necessary to give tone to his 
establishment. Think of a man like that trying to extend a 
chain over the country!" 

The weakness of such an argument is instantly obvious when 
it is stated that the Claflin stores operate under their local 
management. When the Claflins acquire control the store 
policy that has been evolved in answer to peculiar requirements 
is in no wise changed. Lord & Taylor, it is announced, will 
be, so far as the store visitor can perceive, the Lord & Taylor of 
old. The Claflin influence will show only on the books in 
the back office. It is interesting to note that most of these 
stores have absolutely their own organization, even to the 
buyers. The two May stores have their separate buyers, as 
have the two Wanamaker shops. But who shall say that the 
Claflin stores are not chain stores, notwithstanding.? 

The chain-store idea in the music field is growing. The Music 

Trades referred to these articles in Printers' Ink and printed a 

surprising list of chan stores. It asserts that the 

Chains chain system is developing rapidly. In instances the 

Stores^ resultant advantages in buying, advertising, and 
shipping. The list which the Music Trades publishes 
is partly as follows: 

The .(Eolian Company — New York, Chicago, St. Louis, Indianapolis, 
Dayton. 

The Baldwin Company — San Francisco, Denver, Chicago, Aurora, Indian- 
apolis, Muncie, Terre Haute, Louisville, Boston, Kansas City, St. Louis, 
Knox\'ille. 

W. W. Kimball Company — Chicago, Minneapolis, St. Paul, Kansas City, 
Elgin, Freeport, Peoria, Quincy, Rockford, Springfield, Terre Haute, Detroit, 
Bellevue, la., Des Moines, Grand Rapids, Kalamazoo, Brainerd, Minn., 
Mankato, Aurora. 

The Cable Company — Chicago, Richmond, Va., Jacksonville, Detroit, 
Atlanta, New Orleans, Belle\nie, la., Calumet, Mich., Cadillac, Mich., Hancock, 
Mich., Menominee, Traverse City, Durham, N. C, Greensboro, N. C, 
Minneapolis, St. Paul, Charleston, Knoxville. 

The John Church Company — New York, Cincinnati, Boston, Dallas, 
Chattanooga, Chicago. 

The Mason & Hamlin Company — New York, Boston, Providence. 

The Hallet & Davis Piano Company — Boston, Newark, New Bedford, 
Somerville, Toledo, Plainfield, N. J., Jackson\'ille, Fla., Patexson, N. J. 

The Estey Company — New York, Philadelphia, Boston, St. Louis. 



192 ADVERTISING AS A BUSINESS FORCE 

R. Wiirlitzer Company — Cincinnati, New York, Chicago, Philadelphia, 
Columbus. 

Starr Piano Company — Richmond, Ind., Cincinnati, Indianapolis, Cleve- 
land, Los Angeles, Muncie, Hartford City, Dayton, O., Lorain, O., Middle- 
towTi, O.. Piqua, O., Springfield, O., Toledo, O. 

The Eilers Music Company — San Francisco, Eureka, Oakland, San Jose, 
Stockton, Boise, Ida., Portland, Ore., Albany, Ore., Oregon City, Ore., The 
Dallas, Ore., Bellingham, Wash., Seattle, Spokane, Tacoma, Walla Walla. 

The W. A. Leyhe Piano Company has opened nine Texas 
stores in about two years. The movement is rapidly progress- 
ing in other sections. 

The Cokmibia Phonograph Company operates a number of 
stores in various cities; while the Victor Company, however, 
sells only through agents. 

In addition there are about two hundred stores owned by 
thirty music companies in cities of medium size. 

In a general way other advertisers have gone into the chain- 
store movement almost unconsciously. Local conditions com- 
pelled, perhaps, the opening of one store, and then 
Some others followed without scarcely any effort — just a 
I ^^^rt nt seemingly inevitable drift of necessity. In such 

Chains lines as stationery and office equipment, retail out- 
lets have been so unsatisfactory that branch stores 
have been imperative. Yawman & Erbe have stores in New 
York, Chicago, Washington, Philadelphia, Boston, Pittsburgh, 
San Francisco, St. Louis, Cleveland, Los Angeles, Toronto, 
Winnipeg, Vancouver, Ottawa, Montreal. The Prince Furni- 
ture stores in Allentown, Rochester, Hazleton, etc., is an 
interesting development in an unexpected line of goods. 

The Singer Sewing Machine Company always had chains 
of stores in cities throughout the country, and much of its 
independence and trade strength is due thereto. The Water- 
man Fountain Pen folk have been forced to establish some 
stores, and manufacturers with articles like Lion Brand collars 
and shirts, Crawford shoes, etc., have several stores to their 
credit. 

The Washington Shirt Company, Chicago, has a number of 
stores. Through the firm of Weber & Heilbronner, New York, 
The Manhattan Shirt Company operates a chain of nine stores 
in that metropolis which sells only Manhattan shirts, etc. 

Edgar A. Russell, formerly with the Multigraph Company, 
has started an unique enterprise called the Berkley Associated 
Stores of America, which is a co-operative catalogue buying 



NEW TYPES OF RETAILER 193 

house for retailers — an interesting subdivision of the syndicate 
selHng idea. 

So it would seem that the chain of stores movement has 
been swelling to proportions really unexpected in the past decade 
and is as yet only in its early stages of development. It may 
be watched with profound interest by every manufacturer, 
retailer, and jobber. 

One other phase of the chain-store movement is suggested 

by the possibility of concentrating the ownership of various 

chains. Early in 1912 it was rumored that efforts 
Combina- i • . , i-j . i p .i 

tions of were bemg made to consolidate a number oi the 

Chain largest grocery-store chains in various parts of the 

country. Commenting on this, Printers'' Ink (May 2, 

1912, p. 74) contained an editorial from which the following 

paragraphs are taken: 

If the proposed merger of big grocery chain-store systems 
in the leading cities of the East should become a fact, it would 
be a very big fact, indeed. It would directly involve not only 
some 3,000 retail groceries, but indirectly influence and control 
possibly as many more, for whom the combine would buy and 
the extension of the system through the rest of the country 
would undoubtedly follow. 

But the one point before all others that should interest 
national advertisers is the intention of the promoters to -push 
the ^private brands of the combine in its stores, w^hich, if successful, 
of course, means the displacement of many advertised specialties. 

These promoters are David L. Remley and Jacob Maurer, 
proprietors of a chain-store system in St. Louis. They have 
been at work on the plans for months, and are said to be now 
sanguine of early success. The field of their activities is thus 
described by the Journal of Commerce of New York: 

The principal branch stores of the company are: The G inter Company, 6; 
Michael O'Keefe, 130; the O'Connor chain stores, 40, and E. E. Gray, 22. 
All of these are in Boston. 

In New York there are the stores of James Butler, Inc., 200; Andrew Davey, 
34; the Atlantic & Pacific Tea Company, 100; Park & Tilford, 9. 

Brookl;yn has two systems, those of Thomas Roulston, 83 stores, and H. 
C. Bohack, 18. 

Wm. Butler has 140 stores in Philadelphia, and Thomas Hunter has 100. 

The Butler chain stores in Pittsburgh number 34. 



194 ADVERTISING AS A BUSINESS FORCE 

In Washington there are four systems — the Sanitary Grocer Company, 33 
stores; J. T. D. Pyles, 18; Great Atlantic & Pacific, 11, and the United Stores 
Company, 6. 

H. G. Hill, who started the chain in St. Louis now owoied by Maurer & 
Remley, has 31 retail groceries in Nashville and Birmingham, while Maurer- 
Remley own 29 here (St. Louis). 

Duke C. Bowers, Memphis, has 37 stores; Rogers in Atlanta, Ga., has 28, 
and the Kroeger Grocer & Baking Company of Cincinnati has 85. 

There are at least a dozen other systems in New York and other points 
whose stores combined number more than 300, including the Hazel Pure 
Food Company of Chicago. 

Among the principal foreign establishments is that of Sir Thomas Lipton, 
England, with 3,000 branch retail stores, and a French chain operating about 
600 stores. 

Inquiries made by Printers^ Ink of a number of the sys- 
tems named elicited formal denials of any knowledge as to 
negotiations looking to amalgamation. There probably is, 
therefore, no reason to take the matter very seriously at this 
time, except as a straw, and perhaps only the ghost of a straw 
at that. 

But whether or not the amalgamation is put through now 
there is one thing in the story that should not be overlooked. 
Things are happening faster in the retail field than they used 
to happen; mergers will have to come in time, just as they had 
to do at the producing end. It is evolution. 

Three years ago President Whelan, of the United Cigar 
Stores, predicted that within a half decade the retail machinery 
of the country would be revolutionized. There were no pro- 
nounced signs at the time to justify the prediction, but Mr. 
\ATielan had made a close study of retail conditions, and he 
sensed the coming changes before the majority of business 
men were aware of anything unusual going on. 

Chain-store systems can hardly help following the common 
course of business. They will grow, compete with each other, 
and begin to combine. And in the course of competition they 
will exhaust every expedient to make and save profits. They 
will make the fullest use of the advantage given them by their 
large buying power in dealing with individual manufacturers, 
both those who advertise and those who do not. 

Is it likely that they will long respect the popular preference 
for advertised and trade-marked brands.'' On the contrary, 
they have already announced their intention of pushing their 
own private brands, and that is natural and to be expected. 

What are advertisers going to do about it? What can 



NEW TYPES OF RETAILER 195 

advertising do when the machinery of distribution is being 
taken away? 

To combine and dictate prices to the chain stores or treat 
with them on the basis of some trade agreement might be 
feasible for a time, if the law permitted. It is hardly likely 
that such a condition would last. The chain stores would 
begin to acquire or build factories, and the manufacturers, 
in spite of themselves, be driven to establish chain stores, 
either as individuals or in combination. 

Manufacturers, in fact, are nearly up against the stark logic 
of the situation: the battle for markets is going to be fought 
out in the retail store, and the competition of the next half- 
decade is going to be not so much between individual manu- 
facturers as between manufacturers who are seeking retail 
outlets, and the retailers who are growing up into imperious 
competitors with retail outlets assured. 

It is therefore apparent that the specialty manufacturers, 
in the grocery line at least, must sooner or later combine in 
some closer and more effective w^ay than they have done or 
even contemplated. Harmonious relations with the jobbers, 
are important, but it looks as if there would be more important 
questions before many days. The new development would 
threaten the wholesalers even more than it would the manu- 
facturer. It would probably drive the two together for the 
time being. 

It is probable that the first effect on the part of the manufac- 
turers to withstand the competition of the big chain systems 
would be to support the independent stores, and the co-operative 
chains that are certain to spring up, but that this would ulti- 
mately give way to something more like control. That is 
the only thing that would meet the centralized, systematized 
competition of the retail chain. Would it be done first by 
small manufacturers' chains competing among themselves, 
and then afterward combining, as the retail chains are 
doing.'' 

Or would the manufacturers already organized in various 
organizations pursue some more conscious course, and antici- 
pate the crisis by preparing for it.'' . . . 



The mail-order business, as another form of large-scale retail- 
ing, deserves more attention than can be given to it here. 



196 ADVERTISING AS A BUSINESS FORCE 

It is true that the mail-order houses which have been most 
successful have advertised but little through the ordinary 
channels. But, if we include their catalogues and other direct 

TJ M 'Ir advertising by mail to their possible customers, we 
Order realize that their business is almost wholly built up 

Business ^^ advertising. For a time the growth of the mail- 
order business was so rapid as to cause alarm to the jobber 
and the small wholesaler, but of recent years, while the growth 
has continued in the case of a few of the better organized mail- 
order houses, the great flock of less well -organized institutions, 
which threatened to take over a great part of that portion of 
the retail business of the country which could be done by mail, 
have become less conspicuous. It now seems probable that 
while the few big houses will grow normally and perhaps even 
phenomenally, the mail-order business has distinct limita- 
tions which will prevent this type of retailing from cutting 
much more heavily, than it already has done, into the retail 
business of the country as a whole. 

A Chicago correspondent, writing to the New York Journal 
of Commerce on July 25, 1912, gave an interesting summary 
of some of the commercial aspects of the mail-order house, 
although he brought out only a very few of the points at 
which the mail-order business touches advertising. This corre- 
spondent brings out the fact that while there are some 300,000 
country stores in the United States doing a business of nearly 
$3,000,000,000, the largest of the mail-order houses has an 
annual business of approximately $80,000,000. So that while 
these houses may be large in the absolute, they are relatively 
not as important as the volume of business of a few of them 
has led many to believe them to be. 

One of the most important effects of the development of the 
mail-order house is the fact that their success has driven 
department stores and even wholesalers not only to do a 
larger mail business but to conduct their mail business much 
more satisfactorily than they ever did conduct it before. 



NEW TYPES OF RETAILER 197 

ADVERTISING ASPECTS OF CO-OPERATIVE ENTERPRISES 

Co-operation between the successive steps in the distribution 
system is of very recent origin in this country, although it has 

Various ^^^^ successfully employe'd in England and on the 

Types of Continent for a number of years. It has assumed 
o-opera ^o^y^j-ious fomis in this country, some of the co-opera- 
tive enterprises being between one set of selling factors, 
while other forms attempt to unite entirely different factors. 

One of the largest and most noteworthy of these undertakings 
is the United Drug Company, which has as its main character- 
istic the ownership of a large part of the stock of the manu- 
facturing company by the retailers, who serve as the outlet 
for the plant's products. 



*Impressed with a co-operative movement which in 1903 
embraced less than forty dealers, but now includes close to 
5,000 retailers, Printers' Ink asked William C. Neilly, Adver- 
tising Manager of the United Drug Company, of Boston, Mass., 
to relate what were, to his mind, the more important details 
in connection with the development of his firm's system of 
marketing its goods. 

His recital of the facts goes to show how business practice 
in any given line of trade may be revolutionized when once 
consumers learn the inwardness of unjust practices of which mis- 
leading advertising is the outward sign. 

"The heyday of patent medicine advertising," said Mr. 
Neilly, "was in 1903. The space used was extravagant, and 
colossal were the claims which practically proposed to take 
dead bodies and put life into them! 

"There was no check on the word 'cure.' Every preparation 
was heralded as a 'cure.' The people paid their money and 
frequently got nothing or worse than nothing. 

"The demand for advertised nostrums was enormous. 
Druggists had no choice. They were forced to stock them and 
to sell them, or lose a big part of their business. It was a 
riot of fake advertising, but it carried the germ of opportunity. 
Keen eyes and ears perceived the inevitable reaction and the 

*Pnnters"Ink, March 21, 1912, p. 86. 



198 ADVERTISING AS A BUSINESS FORCE 

opening for a big business which might be built up by square 
deahng. 

"Soon the tide turned; resentment against nostrums set 
in so quickly and grew so rapidly that some manufacturers 
were forced into exceedingly critical positions. 

"The United Drug Company's policy matured at this juncture. 
The projectors realized the great demand for prepared medi- 
cines, but it also recognized danger in the fact that 
The United standard preparations might be confused in the 
Company n^i^ids of the public with the tottering 'patent' 
medicines. The two classes were similar in their 
appeal to a large and legitimate field, but very dissimilar in 
intent, purpose, and effect. 

"The word 'patent' implied secrecy and the buyer knew 
little or nothing concerning ingredients. The purchaser ex- 
pected to buy on faith, was not expected to ask questions. 

"The first plank in our platform was 'no secrets.' 

"From the start the composition of our preparations was 
made an open book. The published formulary tells every 
ingredient. The text is in plain English and big type, so that 
the layman can know exactly what he is putting into his system. 
Step into one of our stores and ask the druggist what any Rexall 
preparation contains. He will hand you the printed formulary. 

"The United Drug Company was one of the few concerns 
which did not have to revolutionize its formulas and its litera- 
ture when the Pure Food and Drugs Act went into effect. Once 
an edition of several hundred thousand booklets was destroyed 
because a preparation had been advertised by the phrase 
'Prevents colds.' One of our physicians caught this phrase 
and blue penciled it. The edition was burned up and a new 
one run off with the statement, 'tends to relieve colds.' 

"Painstaking in regard to our preparations became a real 
asset to us. It impressed customers and led to popularity. 

"The corporation of druggists, however, was required for 
our success. Something was needed to enlist the dealer's vital 
interest. 

"To attain this vital interest and secure the successful 
carrying out of our plan, Louis K. Liggett, President of the 
United Drug Company, organized the campaign along lines 
which have been continued to the present day. 

"He insisted upon the idea of confining the sale of our product 
to one druggist in a community. In each town we selected a 



NEW TYPES OF RETAILER 199 

reliable druggist and outlined the possibilities for a give-the- 
[)ublic-a-square-deal drug store in his section and told him 
what we hoped to accomplish through his co-operation. As 
a further inducement and to secure his permanent interest we 
offered him a stock interest in our company and a participation 
in its profits. At our first meeting forty druggists subscribed 
to the proposition. 

"The features chiefly responsible for our success were the 
then radical policy of non-secret prescriptions in place of the 
frequently bogus patent nostrums. 

"Next in importance was the feature of having one exclusive 
druggist in a community. He could stand behind the goods 
with his own reputation. He could recommend them as the 
product of a company and one which he personally backed up 
with a money investment. He could guarantee our products 
to customers as we guaranteed them to him, and print on 
every label this guarantee: 

The United Drug Company and the Rexall Stores selling this preparation 
guarantee it to give satisfaction; if it does not. go back to the store where you 
bought it and get your money. It belongs to you and we want you to have it. 

"The confidence of the druggist was further strengthened 
by an agreement we made to close his agency and repurchase his 
stock at par value with interest any time our dealings were 
not satisfactory to him or his with us. If we should have 
good reason to retire a diiiggist from our organization, we 
could not act arbitrarily in the matter. Each state has a 
grievance committee composed of fifteen of our dealers. If we 
wanted a druggist to withdraw we would present our case 
to a committee which would hear both sides before acting. 
Cases like this are rare. Not a ca^e was submitted last year. 
"The self-government of our organization might be further 
illustrated. Our officers and directors are elected by the retail 
druggists and may be deposed at any time the stockholders 
shall elect to do so. 

" We have no quantity discounts. Under this policy drug- 
gists are not tempted to overstock on our goods. 
The Selling ii insures frequent turnovers and freshness of the 
tke United preparation — a most important feature in our class 
Drug Co. oi merchandise. 

" The druggist gets behind the goods with spirit and 
determination, and the sales increase not only the profits 



200 ADVERTISING AS A BUSINESS FORCE 

of his store but the dividends on his investment. From 
this simple plan has sprung a spirit of co-operation greater 
than we hoped for at the start. The 5.000 dealers are not 
competitors in any sense, consequently they feel free to tell 
everything in an annual stocldiolders' convention. They dis- 
cuss, among special sales features, window displays, newspaper 
and booklet advertising, and all that makes for a better busi- 
ness. They go over the questions of handling of clerks, giving 
of special commissions, store arrangement, store fixtures. . . . 

" We advertise prominently about ten products. The factory 
charges my department with them. The sales department 
adds its expenses. The general overhead for executive, 
administration, and accounting is charged to me. On top of 
all, I add my advertising expenses. It is up to me to sell 
this product and make the sales and profits cover all costs and 
expense, and leave something for dividends. There is no 
shifting of responsibility. Whatever does not go right with 
the ten advertised products becomes my fault and mine alone. 
The advertising manager is in full charge and control of the 
annual appropriation. Last year this amounted to $600,000. 

"We keep close tabs on every community and increase 

or decrease our advertising in each in proportion to the 

Eow the results. A record is kept of each town. It is charged 

United with the cost of the goods shipped there and shows 
Drug. Co. the profit involved. A substantial portion of the 
Advertises profit, usually all of it, in the first year, is applied 
for promoting sales in each community. 

"Although our appropriation is planned a year in advance, 
it is revised every three months in harmony with the business 
done in each town and increased or decreased as each case 
may require. Our first year in any new field is a gamble. The 
first advertising campaign is gauged by our experience in 
similar towns in the same state, and usually our estimate is 
close. The ten products are now being advertised in about 
3,700 newspapers. 

"Beyond the ten advertised products, we have a large list 
of so-called 'tailers,' and special merchandise to take advantage 
of the business created by the advertised articles. Usually 
our advertising in national mediums is confined to a single 
product over a comparatively long time. Just now hair tonic 
is the thing hammered in the big weeklies and magazines. 

"The wisdom of the unique features of our plan has been 



NEW TYPES OF RETAILER 201 

demonstrated, I think, and is a strong illustration of what 
the co-operative principles can achieve." 

Another form of co-operation, which is found in various parts 
Co-operative^^ the country, is that in which the retail concerns 

Retail have joint control over the wholesale house. This is 
Wholesale illustrated by the enterprise which was launched at 

House the National Retail Grocers' Association in Oklahoma 
City, Okla., in the early part of 1912. 

*One of the most significant signs of the changing trade 
conditions is found in the action of the National Retail Grocers' 
Association at its convention last week in Oklahoma City, Okla., 
in endorsing co-operative wholesale grocery houses run by retailers, 
and asking that manufacturers and jobbers favor them by 
putting them on the jobbing list. 

The action derives a large part of its importance from the 
fact that it came on the heels of a lively report on the matter 
by the chairman of the trades relation committee, C. E. 
Beinert, who is also president of the Nebraska Federation of 
Retailers. 

Mr. Beinert openly charged unfairness in trade, due to 
selling merchandise on the quantity price basis, and advocated 
that the national association and the various state associations 
become co-operated buying exchanges for their members. He 
argued that this would solve the problem of unfair buying 
conditions and at the same time would go far to solve and elimi- 
nate unnecessary expenses between producer and consumer. 

The same subject came up frequently in the reports of the 
presidents of the different state associations. 

A good deal of Mr. Beinert 's report is worth quoting. It is 
of interest to manufacturers even outside of the grocery line, 
because it represents the way retailers look at some of these 
problems, and there is heard complaint now and then by 
manufacturers that it is difficult to understand just how the 
retailer views these matters and what grounds he has for these 
views. 

It appears from Mr. Beinert's report and the convention's 
action that the retailer not only has views but that they are 

*Pnnters Ink, May 2, 1912, p. 70, 



202 ADVERTISING AS A BUSINESS FORCE 

strong views, and that he is going to insist on their being carried 
out, with the manufacturer's consent if possible, but if not, 
then anyway, 

Mr. Beinert says in part: 

I don't want you to lose sight of the fact that mail-order houses, large 
department stores, and chain stores, comprising the special interests in the 
retail trade, sell about 15 per cent, and the regular retailers about 85 per cent, 
of the merchandise sold. Who sells the quantity? 

Yet there are many manufacturers who give the mail-order houses, chain and 
department stores the quantity prices and the regular retailers the long prices 
making their profits out of the 85 per cent, who sell the quantity, and giving, 
it to the 15 per cent, who do not sell the quantity, to kill off the 85 per 
cent. A simple case of killing the goose that lays the golden eggs. 

A well-known nationally advertised brand of oats for which we are asked 
to pay 96| cents per dozen is advertised by mail-order houses at 3 for 25 
cents or 35 cents per dozen. 

When the mail-order house receives an order for a dozen, they put in eleven 
packages of the advertised brand and one of their own brand, with a letter 
that usually reads: 

"We have taken the liberty of including one package of our own brand of 
oats. If you do not find it equally good or better than the advertised brand 
it costs you nothing. If you do find it equally good, or better, kindly order it 
the next time. This oats we can sell you at ninety cents per dozen. This, 
our own brand, contains twenty ounces, the same as the advertised brand." 

It is put up by the mail-order house out of the bulk oats sold them by the 
same company that sold them the advertised brand. 

There is only one argument that corporations pay any serious attention to, 
and that is to show them where you can increase or decrease their profits. 

We propose to show them, by the assistance of the jobbers, that their profits 
are made out of the regular retailers, and they will materially increase them 
by putting all retailers on the same basis. 

If the jobbers refuse to assist us to get a square deal, and manufacturers 
vnW not see the expediency of giving us a square deal, then we must go over the 
heads of the jobbers, and as a means to an end we must do our own jobbing. That 
this can be done we have demonstrated to our own satisfaction in Nebraska. 

We took up with a small cracker baking concern that promised to give us 
a square deal. We made them one of the largest and most prosperous cracker 
bakeries in the country. Nine tenths of the Nebraska retailers are patronizing 
it with a living profit as.sured themselves. 

W^e are buying salt in carlots for our members on a co-operative basis, securing 
for them the very lowest market prices, in addition to the usual quantity 
discounts. On top of that the federation pays them a special discount of 
$5 per car, and there is enough left of the saving resulting from this co-operative 
buying to pay the expenses of handling through the secretary's office. 

\\e have made contracts this year for the cooperative buying of broovis, 
wherein our federation gets 5 per cent, and the members get back 10 per 
cent, on all brooms they buy through the federation. If our estimates are 
correct, and we think tiiey are, we will buy 25,000 dozen brooms for our 
members. At an average price of $4 per dozen we will turn back to our mem- 
bers $10,000, besides making $5,000 to finance our organization. 



NEW TYPES OF RETAILER 203 

We are now preparing to make similar contracts for corsets, blankets and 
rubber footwear. The prices made us enable us to compete ivith mail-order 
houses, department, and chain stores. 

We are going slow but sure. What we are doing in Nebraska can be done 
in every state in the United States, and these different states should get their 
inspiration from this, their national association. 

We retailers have for some time unjustly carried the odium of responsibility 
for the high cost of living. There is no doubt in my mind that there is robbery 
between the producer and the consumer, but the retailer is absolutely not 
guilty. 

Indirectly we retailers are to blame because we do not fight for our rights, 
and we will not get them until we do. We, as a national association, must 
cease being an au.xiliary to the manufacturers' and jobbers' associations. 
Co-operation that gives everything to the other fellow does us no good. Let 
us stand firmly on our own bottom and fight for our just due. 



OTHER FORMS OF CO-OPERATION AMONG RETAILERS 

This organization goes one step further than the various 
buyer's exchanges or associations which have grown popular 
in the grocery trade of New York, Philadelphia, and other 
Eastern cities. In these associations the retailers aim to com- 
bine their buying capacity in order to secure jobbers' rates. 
What is really done is to set up a co-operative organization 
which virtually serves the purpose of a jobbing house for them. 

Another form of co-operation is that illustrated by the United 
Store Association which designs to take over for a series of 
retail stores in various lines some of their common functions, 
performing them on a co-operative basis, and, presumably, 
more cheaply and more satisfactorily than they can be per- 
formed by the individual stores. 

Still another form of co-operation, which already has been 
mentioned, is that in which the consumer shares in the profits of 
the retail concerns, gradually extending its operations backward 
from the retailer through successive steps of distribution or even 
into production. This form of co-operation, which is so well 
known in connection with various European enterprises and 
particularly with enterprises in Great Britain, has not gone 
very far in this country. It is in this field that we may look 
for very important developments within a comparatively few 



204 ADVERTISING AS A BUSINESS FORCE 

years. (See Chapter V for a discussion of consumer co-opera- 
tion.) 

The chain store, the mail-order house, and the co-operative 
enterprise have not yet shown just what position they are to 
occupy in the retail distribution system of the United States. 
As nearly as one can judge from present conditions and methods 
it seems probable that all three have only begun their growth, 
and it seems to be a safe forecast that at least the chain store 
and some forms of co-operative enterprise will very soon become 
extremely important competitors of the "regular" retailing 
system. 

Present national advertising methods are aimed largely at 
the "regular" system, although some also have a place for the 
department store. But the chain store, and the co-operative 
enterprise call for new advertising methods. There are few 
of the present forms of appeal to the consumer, and there are 
few of the advertising methods developed for appeal to the 
selling organization which can be adapted to these two forms 
of "new" retailing. If they become a dominant, or even a 
very large part of the distribution system, present-day adver- 
tising will need an almost complete making over. 

REVIEW QUESTIONS — CHAPTER VII 

1. How many department stores are there in the United 
States.'' 

2. What does Mr. Hotchkin advance as an argument for 
entering the retail trade via a New York department store.-* 

3. How can a department store develop individuality.' 

4. \Miat are the main features of the United Cigar Stores 
organization? 

5. Why has the chain-store idea developed so slowly in the 
dry goods business.'' 

6. What are some of the main types of co-operative enterprise 
now in operation in this country.'* 



NEW TYPES OF RETAILER 205 

PROBLEM QUESTIONS — CHAPTER VII 

1. Do you think Mr. Hotchkin's arguments in favor of the 
department store as a means of entering the retail trade are 
as sound as those of Mr. Louis's in Chapter VI in favor of en- 
tering via the country retailer .^^ Does it make any difference 
what kind of goods are under discussion. f* 

2. Do you think the chain-store form of organization has 
enough advantages over individual retailers to grow perma- 
nently at their expense.'' 

3. If in twenty years one half of the drug business of the 
country should fall into the hands of six chain-store concerns 
how would it affect (1) Retail prices, (2) the wholesale drug 
business, (3) the manufacturers of drugs, (4) the remaining 
independent retailers ? 

4. How would advertising be affected by a similar general 
spread of the United Drug Company form of co-operation. 



CHAPTER VIII 

ADVERTISING AND THE WHOLESALER 

IN EVERY important line of trade in the United States the 
work of the wholesaler (or jobber) is undergoing radical 
change. The two main causes for the disturbed conditions 
in the wholesaler's field are: (1) The increased number of large 
retailers and of combinations among retailers which are able to 
perform the jobber's functions for themselves; (2) the increased 
amount and activity of appeal by producers to consumers. 
Department stores, chain stores, co-operative buying associa- 
tions and all sorts of other enlargements of retail operations 
which make it possible to buy in large quantities are constantly 
trying to make their purchases from producers. This means 
not merely a great reduction in the volume of business con- 
ducted through the wholesaler, but it means that the loss is 
mainly from the most profitable portion of the wholesaler's 
trade. This direct buying frequently is referred to as "elimi- 
nating the jobber." The great volume of this direct business 
has made it appear that the wholesaler's elimination is feasible 
in many cases, and much is said about a "jobberless future." 
It is seldom made clear, however, that while there is a handful of 
small retailers left there will be work for wholesalers. Further- 
more, those who deal "direct," do not often put much emphasis 
on the fact that, while the jobber may have been eliminated in 
their cases, the work which he formerly performed — storage, 
assembling, financing, etc. — has not been entirely eliminated. 
Much of it still remains and merely has been assumed by the 
two remaining parties to the distributive transaction — the 
producer and the retailer. Nor do the direct dealers dwell on 

20G 



ADVERTISING AND THE WHOLESALER 207 

the facts that the savings by jobber elimination sometimes are 
more apparent than real, and that such savings as are made 
seldom pass out of the hands of those whose assumption of the 
jobber's work has made this elimination possible. 

The appeals to the ultimate consumer by means of national 
advertising, conducted by the producer, have weakened the 
jobber's ability to control the character of his trade. And thus 
the jobber's business is not only whittled away at its most 
profitable end by direct dealing, but such as is left for him is also 
taken out of his control to a greater or less degree. In defence 
the jobber puts his best selling efforts on brands or trade-marks 
which he has advertised widely on his own account, and which 
can be made to bring him trade which he can control. But 
in exploiting private brands the jobber becomes a competitor 
of his own clients. And we have the beginnings of the chaos 
already described. (See Chapter II.) 

In addition to these two main causes of change in the job- 
ber's work there are many others which apply to different lines 
of trade with particular force. For instance, in the case of the 
dry goods trade, the increased amount of ready-to-wear busi- 
ness is materially modifying the jobber's work. Ready to- 
wear goods are not easily jobbed with regular drygoods lines. 
A "cutter-up" — or maker of ready-to-wear goods — cannot 
use the "regular" drygoods jobbing trade to good advantage, 
nor does the "regular" drygoods jobbing trade care to load up 
with many cutter-up accounts. One after another of the large 
Western drygoods jobbers has gone into this branch of manu- 
facturing for himself, seeking better control over his lines, as 
well as the accompanying profits. In New York the multiplica- 
tion of cutting establishments — taken with the growth of large 
retailers — has put most of the general jobbers out of business, 
and has created a host of "specialty" jobbers who handle a few 
allied lines, many of them being ready-to-wear lines. 

Again, the decreased dependence on imported fabrics in any 
except the most expensive lines has had a direct effect on the 



208 ADVERTISING AS A BUSINESS FORCE 

drygoods jobbing business. Forty years ago the dry goods 
jobber was also, to a large extent, a drygoods importer and, 
consequently, was located at the coast with the entire country 
as his market. But with the increased percentage of drygoods 
business represented by the products of American mills, the 
national, general jobber has largely disappeared from the 
East while there has grown up in Chicago and St. Louis a new 
type of large manufacturing jobber serving the newer sections 
of the country. At the same time the small, local jobber has 
increased in importance. Somewhat similar conditions to 
these which are found in the drygoods business are found in 
other trades. In short, practically every line of business, selling 
goods to be finally consumed at retail, has at work in it influ- 
ences making necessary a reorganization of the jobber's service. 

In almost every trade, however, the two influences already 
referred to as being " main causes " are found. 

These changes in the jobber's work have brought upon him 
an amount of ill-will which he does not entirely deserve. He, 
of all the features of the distribution system, is most often 
called upon to defend his existence. This result of the chang- 
ing conditions in distribution has been intensified by the fact 
that the jobber normally has no good way of defending himself 
without completely breaking with his old patrons. 

The work of the jobber in the modern retail distribution 
system is described in an unsigned article in Printers' Ink, which 
undertakes to divide the modern retail trade into classes, and 
show how the jobber, or other type of middlemen, serves the 
different classes of business. This article shows the bearing 
upon advertising of some of the changes which are in progress 
in the work of the modern jobber, and the bearing of advertis- 
ing in turn upon them. 

*It is costing more to sell goods every day, according to men 
prominent in the retail trade. W. R. Hotchkin, advertising di- 



*Printers Ink, July 4, 1912, p. 12. 



ADVERTISING AND THE WHOLESALER 209 

rector for Gimbel Brothers, New York, says that the average 

selUng costs in department stores will run from 22| to 

25 per cent, of the selling price; in some cases 

Modern ^^iq selling cost is as high as 33^ per cent. Those 

Business n i x • i j m. rru • i i 

Qi^gig figures do not niclude a pront. 1 ney simply represent 
the cost of carrying the goods in stock, the advertis- 
ing and the clerk hire necessarj^ to pass them on to the cus- 
tomers, etc. The Dry Goods Economist is sponsor for the 
following table, which shows the gross profit each department 
head in a large Eastern store is required to show, the percent- 
age in every case being figured on the selling price. It should 
be noted, however, that these gross profits do not include any 
discounts. Each department head is obliged to secure all pos- 
sible discounts from bill prices in addition to the following 
profits : 

Blankets, 30%. 

Candy. 35%. 

Carpets and Rugs, 30%. 

China and Glassware, 35%. 

Corsets, 33^%. 

Dress Goods, 28%. 

Fish and Meats, 18%. 

Fruits and Vegetables, 25%. 

Furniture and Bedding, 33f %. 

Gloves, 28%. 

Groceries, 20%. 

Handkerchiefs, 30%. 

Hosiery and Knit Underwear (women's and children's), 30%. 

Housefurnishings, 331%. 

Infants' Wear, 30%. 

Jewelry and Watches, 35%. 

Laces, Embroideries, etc., 33§%. 

Leather Goods, 30%. 

Linens, WTiite Goods, etc., 25%. 

Men's Furnishings, 30%. 

Millinery, 33|%. 

Muslin Underwear, 25%. 

Neckwear and Veilings, 33|%. 

Notions, 33|%. 

Perfumery and Druggists' Sundries, 25%. 

Pictures, 35%. 

Ribbons, 27%. 

Sewing Machines, 27%. 

Sheet Music, 25%. 

Shoes, 27%. 

Stationery and Books, 33|%. 

Sporting Goods, 27%. 

Toys, 331%. 



210 ADVERTISING AS A BUSINESS FORCE 

Trunks and Baby Carriages, 33 j%. 

Umbrellas, 30%. 

Upholsteries, 33|%. 

Wash Goods, Flannels and Linings, 23%. 

Waists, 30%. 

When it is considered that the department store probably 
does business cheaper than the average small retailer, it will be 
evident that the problem of securing adequate and economical 
distribution has a certain relationship to selling costs. Those 
profits are practically fixed at the figures given, or higher, for all 
goods which are handled through retail stores. Add to them a 
15 to 25 per cent, profit for the jobber, the manufacturer's sell- 
ing cost and the manufacturer's profit, and the cost of production 
looks pretty small as compared with what the consumer pays 
for the goods. It is small wonder that consumers growl about 
the high cost of living, and maintain that they are being robbed. 

The popular interest just now is fixed upon prices, probably to 
a greater extent than ever before, and the manufacturer who can 
give equal quality for a lower price or better quality for the 
same price enjoys an advantage in proportion to the intensity of 
the popular sentiment. And about the only place the price can 
be profitbly shaved is in distribution cost. The retailer must 
have his profit, the manufacturer must have his; there is 
little chance for a saving there. But if it is possible to get 
the goods into the hands of the retailer at less expense, a smaller 
price to the consumer will suffice. It is a question which faces 
most manufacturers of new products : how to get the most effec- 
tive distribution at least expense. 

It is not possible, nor would it be useful, to go into the whole 
question of distribution in this space. There are, however, cer- 
tain short cuts which may be followed with special kinds of goods. 

Generally speaking there are three methods of distribution: 

(1) Jobber, (2) direct to dealer, and (3) direct to consumer. 

There are also three classes of goods: (1) new prod- 

Three ucts, (2) similar goods for less money, and (3) better 
^D^^'f^b "^ quality or larger quantity for the same money. 
tion The new product usually requires demonstration. 

People must be taught what it is and what it will do, 
and that demonstration must be made to the consumer. The 
manufacturer with a jobber and a dealer between himself and 
the consumer has no surety that his goods are being properly 
presented. 



ADVERTISING AND THE WHOLESALER 211 

To a less degree it is the same condition which confronted the 
makers of typewriters when the machines were first developed. 
Nobody knew what a typewriter was, definitely, neither did 
the great business public see any earthly reason why it should use 
machinery to write letters. So it was necessary to develop a force 
of men who talked typewriter exclusively, and talked to the man 
who was to use the typewriter. Jobbers and dealers were im- 
possible, from the very nature of the goods. Thus it comes about 
that whereas the cost to manufacture a standard typewriter is 
somewhere around $20 (some standard machines cost as low 
as $18) the price to the consumer is $100. It looks as though it 
would be more economical to let the stationery jobbers handle 
the typewriter business, but at the time the typewriter was put 
on the market it was impossible to sell it that way. The most 
economical method of securing distribution, as the Irishman says, 
was the most expensive in that case. 

There are a lot of novelties being sidetracked right along be- 
cause the jobber-dealer combination does not sell them to the 
consumer. They need demonstration which the jobber with his 
15 per cent, profit and the dealer with his 33^ cannot afford to 
give them. Hence when the consumers are sent by the manu- 
factuer's advertising to their dealers they are unable to "find 
out" about the goods, and a good many sales are not made. 

The department stores throughout the country are furnishing 

a means of distribution of these goods which need demonstrating, 

because of their power to buy at first hand and to 

Direct combine the jobber's profit and the dealer's. There 

Depart- ^^^ ^^°"* ^'^^^ ^^°^^^ ^^ *^^ United States which 
ment Stores regularly buy most of the manufactured lines they 
carry in this way, and some manufacturers have ex- 
tended the system a good deal further than that. The depart- 
ment store which buys goods at, say, 60 per cent, discount, 
can afford to assign a saleswoman to . demonstrate the goods to 
the exclusion of everything else. A list of a thousand depart- 
ment stores will cover the country pretty thoroughly, and will 
get the goods pretty well known. 

This department-store system of direct buying, particularly 
in the textile field, is getting so common that there is a well- 
developed tendency on the part of jobbers to cover themselves. 
For example, Marshall Field & Company, besides their one 
big retail outlet, are leasing factories and preparing for the out- 
put of brands which they can control. The H. B. Claflin Com- 



212 ADVERTISING AS A BUSINESS FORCE 

pany, on the other hand, is rapidly adding new retail outlets, by 
purchasing control of leading stores wherever possible. Of 
course this merely intensifies the situation and makes it more 
than ever imperative for the independent manufacturer to sell 
his goods first of all to the consumer by advertising and demon- 
strations. 

Indeed, as S. R. Latshaw, manager of the textile department 
of the Curtis Publishing Company, recently said before the con- 
vention of knit goods manufacturers, "There is only one change- 
less factor — the ultimate consumer." 

Of course it means more work — and in the beginning more 
expense — to sell a thousand department stores instead of a 
dozen or fifteen jobbers; that is, provided the jobbers will 
handle the goods at all. But it is a question of reaching the 
consumer, and nothing short of that will serve. 

Sometimes it is possible to stir up the jobbers to take 
an interest in the product by starting something with a 

Usinq ^^^ dealers in each territory — making it appear that 

Direct the business is going direct to the retailer, and show- 

Sale to ing the jobber that the retailer will buy the goods. 
^^^j h}F ^^^ retailer in a small city in northern New York 

" ^" unwittingly showed a manufacturer of novelties how 
to work it. This particular manufacturer had been to a Syra- 
cuse jobber with a "catnip ball" — a wooden ball loaded with 
catnip for pussy's edification — and the jobber had turned the 
proposition down cold. A retail druggist in another city — a 
friend of the manufacturer — heard the story, and persuaded 
the manufacturer to sell him several gross of the balls at the 
jobber's price. For five days he bombarded the people with 
teasing newspaper ads about cats, and finally came out with an 
offer of a catnip ball for ten cents. Nobody else in town had 
any, and the hurry calls upon the Syracuse jobber met with 
a somewhat surprised, "Sorry, but we don't carry them." The 
jobber stocked catnip balls, though; he could hardly refuse when 
every dealer in town was inquiring about them. 

Somewhat similar in effect is the system followed by the 
maker of a toilet preparation. Quarter-page ads in the drug 
papers offered one full-size package, retail price a dollar, free to 
every dealer who would fill out the coupon with his name and 
address. "For further supplies go to your jobber," the ad 
read. There were no strings to the offer, and no conditions 
which any dealer would not be perfectly willing to comply with. 



ADVERTISING AND THE WHOLESALER 213 

Simply the name and address was necessary on the coupon, but 
those names and addresses could be used on the jobber with 
telling effect. 

One of the objects of these plans to stir up dealer and con- 
sumer demand ahead of the jobber is to impress it upon the 
jobber's mind that these are the manufacturer's customers, 
not wholly his own. That has been one of the difficulties 
with jobber distribution which manufacturers have had to 
contend with — that the jobber controlled the trade of his 
territory, and could swing the greater part of it to some other 
brand unless the consumer advertising was simply irresistible. 
In that case he would lie down on the job and sell the goods 
only when the dealer demanded them. But when the jobber 
sees the demand being created in his own territory, so that 
he is constrained to come and ask for the line instead of having 
it offered to him on a silver platter, it makes a difference. 

But all of these plans — and I might include several more, 
such as renting dealers' windows on the principal streets and 
giving demonstrations of the goods therein, hiring college 
students during vacation time to visit housewives and demon- 
strate cooking utensils, etc. — these plans are only for the 
start of the campaign. With the great majority of articles 
it is not possible to get along permanently without the jobber. 

It sometimes looks like a good thing for a manufacturer 
to tie up by contract with a large mail-order house or two 
or three department stores. All his output is contracted for, 
and he doesn't have to worry about distribution or credits. He 
is sure of his money, and sure of a profit at the end of the year. 

It looks good, but it isn't, because the manufacturer is 
competing with others on a basis of manufacturing cost alone. 
The moment somebody else can make the goods cheaper than 
he can, he loses the business — and is left with no selling 
organization and no reputation. It is necessary to begin all 
over again. 

And another reason why the manufacturer needs the jobber 

is this : he doesn't know who his customers really are. He may 

think he will go direct to the retailers, but beyond a 

Why the certain point that isn't practicable, because it costs 

turerNeeds^^^ much to make small sales in widely scattered 

the Jobber territory, and there are a lot of dealers who could 

carry the goods whom a manufacturer would never 

find if left to himself. For example, the Ingersoll Dollar 



214 ADVERTISING AS A BUSINESS FORCE 

Watch is sold by more than 61,000 dealers. Most of them 
would probably be characterized off hand as "retail jewel- 
ers," yet no list of jewelers would contain anything like 
all of them a list of those who handle jewelry — of possible 
customers of a new manufacturer in the jewelry line — would 
include auto supply dealers, piano dealers, dealers in sewing- 
machine supplies, photographic goods, drygoods, groceries, 
furniture, plantation supplies, harness, soft drinks, meals, 
books, cigars, bicycles, stoves, picture-frames, window glass, 
and men's clothing. Without the jobber's salesman, who 
is familiar with a certain territory, it is almost impossible for 
a manufacturer of goods in common use to get anything like 
the maximum distribution for his product. He doesn't know 
who the dealers are, and it costs too much to find out. The 
15 per cent, profit paid to the jobber will be much less than 
would be required to reach all those dealers direct. 

But throughout the campaign it should be borne in mind 
that the consumer is in reality the only staple element, the only 
factor which may not change overnight. The jobber may 
conclude to push his own private brand among his trade; 
dealers may switch for goods on which there is a larger profit, 
but the consumer's preference, once determined, will go a long 
way toward preventing those very things. 

A grocery jobber's defence of the work which the wholesaler 
in his trade is performing is found in an address delivered by 
^ Arthur M. Wilson, President of the New England 
Wholesale Wholesale Grocers' Association, before a gathering 
Defence ^^ wholesale grocers in Harrisburg, Pa., in June 
of His 1912, as it was reported in the New York Journal 
usmess ^j- Commerce. Mr. Wilson raises the interesting 
question as to who is the middleman and who is the pro- 
ducer under the present conditions of disorganization. 

*Not long ago one of the most prominent manufacturers 
of proprietary goods came to me and said: "We have got 

*Part of an address delivered by Arthur M. Wilson, President of the New 
England Wholesale Grocers' Association before a gathering of wholesale 
grocers in Harrisburg, Fa., in June, 1912. Reported by the New York Journal 
of Commerce — Printers' Ink, June 20, 1912, p. 70. 



ADVERTISING AND THE WHOLESALER 215 

to do something to get our goods into a certain large retail 
store. He is a large distributor and we must have a part of 
his business. He will not buy through the jobber; I have 
tried to sell him and he says he will give me an order if I will 
ship direct." 

I asked him to wait a moment, and I called for a slip from 
the bookkeeper and showed the manufacturer's agent where 
we had sold this same retailer, two days before, over $200 worth 
of his goods; also showed him that he was buying right along. 
"Now," I asked, "can you show me how you can increase your 
output by selling him direct .^^ You have sold and are selling, 
me and the other jobbers and we are giving you a good business. 
Do you believe w^e will be as interested in your product if you 
step in and take away from us some of our best trade.^" He, 
of course, was obliged to admit that it was better to do as 
he had been doing and depend upon the jobber. 

But the real trouble comes from the fact that many agents 
would never have come to us and asked the question, but 
would have looked at the order as so much gained to-day; 
would have shipped the goods, leaving it for us to find out 
afterward. . . . 

Another thing, if quantity is the object and the manufacturer 

thinks it is right for several retailers, or a chain of stores, to 

combine and buy, say, a carload — generally less — 

The Jobber T^l^y should not the jobbers combine and buy, say, 

OiiantUv ^^^ ^^ twenty carloads, and ask Mr. Manufacturer 

Price for an extra 10 or 15 per cent..?^ The manufacturer 

does not want this, for he knows it is not for his best 

interest. 

Now, if the manufacturer wants the jobber to distribute 
his products — and nearly all say they do — then let them 
play fair. Don't let "thief" be Ijranded on his forehead be- 
cause he tries to steal 10 per cent, of the jobber's trade. Not 
only that, but let him remember that the large stores and 
the chain of stores are not, as a rule, his best distributors; 
that the small retailer, with the small capital, works just as 
hard to distribute a package of his goods as his larger competi- 
tor's and is entitled to just as much pay per package. 

It has been said that the middleman must go. Who is the 
middleman? We all agree the jobber is a necessity to gather 
together commodities from all points of the world, obtain 
them in their various seasons and hold them until such time 



216 ADVERTISING AS A BUSINESS FORCE 

as the retailer wants them for his customers, the consumers. 
The jobber's business is not so arranged that he can sell the 
consumer. 

The retailer is certainly a necessity, for the average family 
could not live over twenty-four hours if the retailers were all 
to close their doors. Next come the manufacturer's agents. 
Are they the middlemen.? I think they would show to you 
forcibly they are very much of a necessity. Then it would 
be the manufacturers; but how could we have the many articles 
which now seem absolutely necessary for our tables if we were 
to push them out? 

There are very few manufacturers in this country who make 

a business of distributing all of their products direct to the 

retailer. There are but few who can do so for the 

fn-i one reason that it is too expensive. They realize 

Selling ^^^^ with the capital invested for the difference 
between the price to jobber and the price to retailer 
it would be impossible to handle their products. The jobber, 
as a rule, discounts his bills and the manufacturer gets his 
money back quickly to buy more raw material. The jobber 
also furnishes free storage and drayage, so that the manufac- 
turer's product is well distributed all over the country, available 
on a moment's notice to supply the retail trade. If the manu- 
facturer should attempt to furnish the retail trade direct he 
would not only have a large number of small accounts to look 
after, which would in itself increase his office force a hundred- 
fold, but his risk of loss would be increased many times. Fur- 
thermore, he would be obliged to have warehouse charges 
in every city in the country, pay drayage and also be under the 
expense of having men in each place to look after, check in, 
and ship his goods. 

When this can all be secured for 10 per cent., yet would cost 
the manufacturer doing it himself 15 per cent., why should 
he not say "Mr. Jobber, I want you to do this work for me; 
I will pay you a fair price and will not interfere with your 
customers." Some, we admit, do say this and carry out their 
arrangement faithfully; others say it, but the moment we are 
off our guard and they have an opportunity to sell a large 
retailer or combination of retailers whom they feel will pay 
their bills promptly they take advantage of it and fall back 
upon the old cry of "quantity order — we must have dis- 
tribution — we could not afford to let it pass, for you could 



ADVERTISING AND THE WHOLESALER 217 

not have sold them and they would have had some other 
fellow's goods." 

From these excerpts in defence of the jobber it will be 
seen that the jobber himself has become tacitly to recognize 
that he is on the defensive. There seems to be no denying 
the fact that, if the jobber were still conducting his trade as 
it was conducted thirty years ago, the problems of modern 
distribution of manufactured merchandise would be very much 
simpler than they are. It is a very serious question, however, 
whether the old methods, if they were followed by any con- 
siderable portion of the jobbing trade without modification, 
would make it possible for the jobber to earn a living profit. 

It being clearly the case that the jobber still has much 
work to do, even though direct purchasing and other new 
methods may have cut off some of his trade, the jobber contends 
that he is justified in adopting methods of conducting his 
business which will enable him to avoid the necessity of carrying 
on his work at a loss. 

These methods which the jobber has adopted for saving his 
profits from annihilation have drawn upon him bitter attacks 
from every side. The three defensive methods of the jobber 
which we wish to discuss are: (1), the undertaking of manufac- 
turing by the jobber on his own account; (2), the develop- 
ment of trade-marks or private brands which the jobber owns 
and puts upon goods produced for him by others, and, (3), 
direct appeal to the consumer in competition with the appeals 
being made to the consumer by the manufacturer. 

"substitution" by the jobber 

The following article expresses a commonly accepted view 
of the commercial effects of these defensive efforts of the 
jobber. This article appears anonymously, the author being 
said to be "The Advertising Manager of a Well-known Drug 
Specialty." 



218 ADVERTISING AS A BUSINESS FORCE 

*Tlie writer has been very much interested in the articles 
now running in Printers' I?ik regarding the past, present and 
future of the middleman — the jobber. 

The first article, written by the advertising manager of 
the firm of Francis H. Leggett & Co., wholesale grocers, indi- 
cates pretty clearly how valuable the jobber might be if he 
confined his activities to actual jobbing or distributing. In 
spite of the fact that the jobber is an apparently necessary 
factor in economical merchandising, it is a matter of much 
concern to the wholesale trade in general that few manufac- 
turers, particularly of advertised trade-marked goods, now 
confine their sales exclusively to the jobber. 

In the drug line, for example, there is a growing tendency 
among manufacturers of advertised specialties to sell the 
"cream of the retail trade" direct. The largest and most 
influential retail druggists buy almost everything "direct" 
and in most cases get the manufacturer's very best wholesale 
discounts. As this policy becomes more and more general, 
the jobber's field is being restricted more and more to the 
smaller dealer — the dealer whose capital and output does 
not make it possible for him to buy the quantities necessary 
to obtain "wholesale discounts." 

It is this condition of affairs which is giving the wholesale 

trade the most worry, and it is this condition of affairs which is 

responsible for the general reduction in profits of the 

rVh^ wholesalers, many of whom, " seeing the handwriting 

if"? 7^ - ^^ ^^^ wall," are taking up specialties themselves 

ture as manufacturers. For example, we have Eskay's 

Food, Calox Tooth Powder, Riveris Talcum Powder, 

Pebeco Tooth Paste, Steero Bouillon Cubes, etc., etc., all made, 

marketed and advertised by prominent "wholesale druggists." 

Manufacturers assert that the jobber has only himself to 
blame for his loss of the most desirable part of his business 
as a distributor. The jobber has taught the retailer how to 
substitute successfully, and the jobber is more directly respon- 
sible for substitution than all other causes combined. 

When an advertised article became sufficiently successful, 
the first thing the jobber did was to offer the retailer something 
else to take its place, usually under the jobber's label. The 
jobber's salesmen, to get business, told the retailer that his 



*Priniers' Ink, August 25, 1910, p. 38. 



ADVERTISING AND THE WHOLESALER 219 

product was "just as good as" or "just the same as" and gave 
the retailer a big margin of profit to push these goods. The 
retailer was interested and in many cases substitution in his 
store dated from the day the jobber taught him hoiv to do it. 
From this beginning came the substitution evil and from the 
teaching of the jobber the retailer soon learned how easy it 
was to buy goods from a manufacturer under his own label 
so the jobber is now getting cut off from a considerable portion 
of that class of trade. 

In the meantime, the manufacturer of the advertised specialty 
began to wake up to the fact that the jobber was doing him 
more harm than good and that while the jobber was filling 
all orders, calling for the advertised specialty, his salesmen 
were in reality working against the interests of the advertiser 
by pushing competitive goods under the jobber's own label. 
Who, then, is to blame if the manufacturer of an advertised 
specialty feels that his interests can best be served by going 
to the "worth while" retail trade direct and giving them all 
the profit there is in his article. In giving the retailer the profit 
formerly allowed the jobber, the manufacturer is going a long 
way toward preventing the substitution the jobber has en- 
couraged. The additional profit, represented by the wholesale 
discount, makes the retailer more friendly to the product in 
question and under such circumstances the dealer can hardly 
afford to be antagonistic or to attempt substitution. 

The position of the jobber to-day would be entirely different 
if he had acted merely as a distributor of those goods which 
his trade demanded; manufacturers would still be glad to take 
advantage of the economies which such service makes possible. 
But manufacturers who invest heavily in advertising and 
succeed in popularizing a trade-marked specialty must protect 
their business, and under present conditions the economy 
of distribution offered by the jobber is too often more than 
offset by his willingness to push an "own label" product in 
direct competition with the advertised article. 

If the jobber is "doomed," as many seem to think, who can 
doubt that he is to blame? 

THE PRIVATE BRAND WAR 

Around the private brand wages one of the most violent 
struggles in the jobbers' war for existence. The pros and cons 



220 ADVERTISING AS A BUSINESS FORCE 

of this method of exploiting sales are discussed in the following 
article by P. R. Barney and in the letters which it drew forth 
from jobbers and others : 

*In summing up his views on the important question of 
private brands, the advertising manager of one of the most 
widely advertised breakfast foods recently remarked epigram- 
matically: "If I had been in Mark Twain's place and owned 
his reputation, would I have been writing books and letting 
some other fellow put them out into the market as his own? 
I guess not! The private brand involves the same principle." 

It is not difficult to appreciate what he meant after a little 
study of the situation. 

A certain manufacturer of fine raincoats has long had dealings 
with a certain department store. He much prefers not to 
attach private labels to his product, believing that the latter 
should, for many reasons, bear his own trade-marked and 
widely advertised brand name 

This department store, however, has invariably stipulated 

that the raincoats it sold must have its own label attached 

to them, refusing to accept them otherwise. The 

Rdailers manufacturer has been compelled to capitulate to this 

Brands demand, rather than lose the business, which is con- 
siderable. And, having made this exception once, 
during the early days of his struggle for recognition, it is now 
not easy for him to turn tables and refuse to sell this store 
any more privately labeled goods. 

But, in the meantime, what is happening.? The manufac- 
turer has been supplying the big store with the wherewithal 
to build up a reputation for what is, in reality, a rival brand 
of goods to his own regular brand. The reputation for quality 
which this manufacturer's goods can build up for any brand 
name which might be attached to them can now, at any time, 
be saddled at will by the big store on to the goods of any other 
raincoat manufacturer by the mere sewing of the store's 
private label to the collars of the latter. 

But the department store, on the other hand, happens to 
be in the manufacturing business itself, in another line, putting 
out a widely advertised, trade-marked brand of hosiery. And, 
for reasons best known to itself, it steadily refuses to do for 

*Pnnters Ink, August 4, 1910, p. 8. 



ADVERTISING AND THE WHOLESALER 221 

others what it expects others to do for it. In other words, it 
will not put out its hosiery under private-brand names. "The 
sock is on the other foot" then. The store's views on the 
question of private brands are completely revolutionized, all 
of which reminds one of the old adage: "The devil was sick, 
the devil a monk would be; the devil was well, the devil a 
monk was he." 

Probably few, if any, products are really labeled as private 
brands because manufacturers 'prefer it. They may assert 
that they do business thus because they like it best. They 
may even hypnotize themselves into believing conscientiously 
they like it best. But the fact remains that private labels 
are, in the main, put on goods which are the result of over- 
production, or which are of second or third quality; or they 
are put on goods which have not a sufficient financial backing 
to accord them proper advertising. In the first two instances 
the goods are generally the product of manufacturers who 
have well-established advertised brands, and who are too 
shortsighted to see that by so doing they are cutting off their 
own noses. In the third and last instance the manufacturer 
usually puts out nothing hut private brands. In his case, it 
cannot be denied that he hopes his product will sell on the 
basis of one or a number of comparisons with the real leader 
in its field,which is invariably advertised. Such a manufac- 
turer is, in a sense, a business pirate, appropriating, as his own, 
reputations which neither his effort nor his money was instru- 
mental in producing. Vowing strenuously that he doesn't 
believe in advertising, he is nevertheless industriously hanging 
on to the tail of the kite that keeps hivi up, by advertising. 

The manufacturer of private brands, almost without excep- 
tion, uses this classic argument, to the effect that his method 
of selling saves the cost of advertising, "the tolls of the battle 
in the columns of the press, which must be added to the cost 
of the goods," as one such manufacturer has put it. Naturally 
this kind of reasoning utterly throws to the wind the incon- 
trovertible fact that the saving manufacturing cost per unit 
between a maximum sale of a thousand on an unadvertised 
brand and of a maximum sale of a million on an advertised 
brand is, without a doubt, far greater than the cost of adver- 
tising. 

But, aside from all this, how does the manufacturer of private 
brands fare.'' 



222 ADVERTISING AS A BUSINESS FORCE 

Says V. B. Brown, an ofBcial of the Wabash Baking Powder 
Company, one of the largest canning concerns putting out 
private brands: "Don't understand us as being opposed to 
advertising. We are heartily in favor of it, only we believe 
in the satellite rather than the system. That is, we believe 
in giving the retailer the initiative to build up his trade on his 
own brand of goods, rather than in creating a brand for our own 
goods among his trade and compelling him to join the system. 
His conscience never troubles him, because he has saved the 
consumer some money. A merchant, by handling his private 
brand of goods, gets the benefit of the advertising offered by it, 
whereas it is of no advantage to him to supply a demand among 
his trade that has been created outside of his own efforts. 
The influence of the dealer is more valuable than the columns of 
the press." 

The canner who takes his position on the side of the private 
brand, as above stated, seems to forget that he is thereby 
placing himself at the mercy of every retailer with whom he 
may do business. The retailer's every whimsical exaction 
as to price must be met, from time to time. He can never 
be certain but that he will find his retailers leaving him, taking 
their private labels with them, and going to other and cheaper 
manufacturers who may have inferior private brands. The 
consumers won't know of the change, however, and will keep 
on buying and being cheated, as if nothing had occurred. 
And then what of the dealer's conscience and the consumer's 
money.'' 

The above relates largely to retail dealers' own private 
brands. When it comes to jobbers' private brands, the objec- 
tions roll up even faster. 
Jobbers' Extensive consumer advertising, without a doubt. 

Brands ^^ ^ more practical guarantee of quality than any- 
thing else. The contrast as to quality between the 
standard advertised brands and the unadvertised retailers' 
brands may be great, but the contrast as to quality between the 
standard advertised brands and the unadvertised jobbers' 
private brands is far more glaring. Jobbers are not manufac- 
turers. They have no money invested in manufacturing plants. 
Their business success is not dependent entirely upon the success 
or failure of one or another brand, as is the case with the manu- 
facturers. The manufacturers' whole business success depends 
upon maintaining the quality of their output; their everything 



ADVERTISING AND THE WHOLESALER 223 

is staked upon it. Not so with the jobber. If the jobber loses 
money because of the poor quality of his private brand of corn, 
he can make it up, and more, on his private brand of flour. 

The New England Association of Manufacturers' Repre- 
sentatives recently issued a treatise condemning the private 
brand evil of which the following is a part : 

Wholesalers will seldom, if ever, pay more for their brand 
than for the standard brands. Generally they expect to buy 
cheaper. The quality is, therefore, adjusted to meet the 
price. 

If manufacturers had any inferior goods to work off, would 
they not be more likely to sell them under grocers' brands than 
under their own.f* 

Retailers frequently buy goods by sample the first lot, but, 
when wholesalers change their quality or source of supply, 
they never notify the trade. The quality, therefore, may be 
excellent this year, but poor next. Manufacturers spending 
large sums in advertising and pushing their goods cannot 
afford to trifle with the quality and thus injure their reputation 
and trade. 

Legitimate manufacturers appreciate the value and necessity 
of turning out a fine article under their own label and realize 
that it does not make much difference what is put under a 
wholesaler's brand, provided it passes the buyer's approval 
as to price. 

Official reports show that few manufacturers' brands are 
among the goods found adulterated by boards of health, while 
wholesalers' brands so condemned are many. 

Many wholesalers are dropping private brands since the 
passage of the pure food laws, while others are restricting such 
brands to the state limits so as not to clash with the na- 
tional law. 

The National Food Magazine recently offered an editorial 
on this very important topic, which read in part as follows : 

"This 'private brand' man manufacturing goods to sell 
within the state of manufacture is in the business, not to make 
a reputation, but to make money and to make it rapidly. 
Hence his scheme is to doctor and dose the foods in ways 
possible to cheapen the cost of production. He employs the 
cheapest help; he buys the raw products at the lowest price; 
he even buys the decomposed and cast-off products of legitimate 
factories and by chemical preservatives and coloring makes 



224 ADVERTISING AS A BUSINESS FORCE 

them into foods sold to the consumer as pure, wholesome 
comestibles. 

" Inasmuch as jobbers' private brands are not advertised to 
the consumers, it falls to the lot of the retailers to do all the 
hard work of introducing them. And then any one of a number 
of different questions as to quality, price, credit, or discounts 
may make it highly advantageous to change to some other 
jobber's private brand, which means begin the introductory 
work all over again. 

" But possibly nothing more eloquent illustrates the un- 
wisdom of private brands than the ever-increasing number 
of reputable manufacturers who are joining the ranks of those 
who refuse to put out private brandg. Among the canners 
alone, they number the Van Camp Packing Company, Indian- 
apolis; the California Fruit Canners' iVssociation, San Francisco; 
W. R. Roach, Hart, Mich.; Strasbaugh, Silver & Co., Aberdeen, 
Md., and the H. J. Heinz Company, Pittsburgh. And what 
is true in the canning industry may be foreseen in any number 
of other lines." 

This article drew out a number of letters for and against the 
private brand. The following were printed as tj7)ical of the 
main arguments on either side 

*A. C. Hammesfahr, the Western representative of Collier's 
in Chicago, states his beliefs as follows: 

Editor of Printers' Ink: 

The article in the August 4th issue of Printers' I)ik en- 
titled "The Private Brand Pitfall," interested me very much, 
especially the paragraph quoting A. B. Brown, of the Wabash 
Baking Powder Company. Having had retail experience 
in a business where baking powder was sold, I may be qualified 
to give some information that may be of interest. 

The big percentage of our customers were from the great 
middle class, although much of our goods attracted the better 
class. I remember one time that we put in quite a stock of 
our private brand baking powder — by that I mean baking 
powder with our own label on it. A twenty-five cent package 
was over twice as large as the same priced box of Royal. 

*Pnnters Ink, August 25, 1910, p. 41. 



ADVERTISING AND THE WHOLESALER 225 

It looked good to us, but when I tell you that at the end of 
a year we had only sold about a dozen boxes you will realize 
that private brand had no attractions for us after that. 

At that time I didn't know much about advertising, but I 
learned it was mighty good business to handle goods that 
people knew and required almost no effort to sell. When we 
were carrying hundreds of different articles it didn't pay to 
take the time to push a private brand. 

This same condition prevailed in connection with bottled 

and canned goods. Several times we bought pickles, catsup, 

etc., from local people. The consumer, however, usually 

came to the store asking for Van Camp's and Snider's Beans, 

Heinz's and Snider's Catsups, and so on down the 

The Place line in connection with practically everything that we 

0Jl;^^^ handled. 

Brand I believe, however, that private brands can be used 
very effectively in many of the poor districts in the 
big cities like Chicago because there are so many people in 
these sections who do not know the different articles by name 
on account of lack of education and also because quantity is 
the important factor with them. A. C. Hammesfahr. 

On the other hand, S. W. Roth, editor of The Retailers* 
Journal and The Wholesale Grocer, Chicago, elucidates his 
beliefs on the private brand question in part as follows : 

Editor of Printers' Ink: 

In his consideration of the question of private brands, P. R. 
Barney, in the August 4th issue of Printers' Ink, predicates 
his whole line of reasoning upon theories that are plausible 
enough, but which do not work out in practice. 

When a wholesale grocer has a private brand packed by 
a manufacturer, he, and not the manufacturer, is responsible 
for the success of that brand. 

He does not hire an inferior manufacturer to put up fine 
goods, any more than a publisher would hire a poor man to 
do good editorial work. The result of the product in either 
case depends upon the man who is having the work produced. 
It is his judgment, his energy, his direction, his capital that 
enters into the success of the product created. 

In a slightly different sense, the same thing is true of the 



226 ADVERTISING AS A BUSINESS FORCE 

manufacturer. He does not plant, pick and pack the tomatoes 
that go into the can bearing his brand. Neither does he con- 
duct the advertising campaign or sales force necessary to put 
value in his brand, commensurate with the quality of the goods. 
He hires good help to do this work. Still he is the manufacturer 
because he is the directing force. 

Mr. Barney supposes that packers with a reputation for 
packing fine goods for others are entitled to the reputation 
that resides in the brand. He ought to know that the identical 
quality may be put up by other packers without in any way 
affecting the brand value. It is the brand the consumer 
wants, because the precise quality for which the brand stands 
is known. 

The manufacturing wholesale grocer, who has his private 
"brand," is just as jealous of the reputation of that brand 
as any specialty manufacturer is of the brand he has created. 
The jobber has his ideal, and if he hires a manufacturer to put 
up his goods, he insists on having them put up his way. If one 
manufacturer does not satisfy him he turns to one who will. 
Whatever value he finally creates in his brand name comes 
to the wholesale grocer, as a result of his efforts. The manu- 
facturer is simply his hired man, albeit he may be a good one. 

Mr. Barney's notion that a manufacturer packs his best 

goods under his own brand, and puts what is left into the 

Fair Play jobber's packages, is not worth considering any 

is the further than to call attention to the fact that such 
Solution a relationship between the manufacturer and the 

of the jobber is not possible. Of the hundreds of packers of 
^^^ ^ vegetables and fruits in this country, those who put 
up goods under their own brand may be counted on the fingers 
of one man's hands. 

The manufacturer spends thousands of dollars promoting 
his brand among customers. Having covered the entire 
country with his consumer and retail grocer advertisements, he 
cannot afford to create the machinery necessary to take advan- 
tage of this advertising. It would mean a sales force, a dis- 
tributing force, and a collection force in each important city 
of the country. All of this force would be devoted to the 
business of handling one item. 

The wholesale grocers in every section of the country main- 
tain such forces, and they are able to do so effectively, because 
they are handling goods of great variety. Their territory may 



ADVERTISING AND THE WHOLESALER 227 

be circumscribed with respect to certain lines of goods, but 
it is thoroughly covered. This machinery which the wholesale 
grocer has created is valuable to the manufacturer who pro- 
motes the sale of his goods to the consumer all over the 
country, and he naturallj^ takes advantage of it. 

The specialty man would like to have the jobber push his 
brand. The jobber feels he cannot afford to do this. His 
own brands have become a necessity, and in his own special 
territory he is bound to push these. His aim is to associate 
his brand name with goods of high quality, so that the consumer 
becoming accustomed to the name will buy anything under 
that brand name with the full assurance that the goods will 
be satisfactory. 

The jobber does not confine his brand name to one brand 
of goods. He carries a long line under one brand, and when 
a retail grocer creates a good trade for such goods, the jobber 
feels that he has made a customer who will not only carry 
his "brands," but will buy bulk goods from him as well. This 
is one of the prime objects of jobbers' private brands. 

Another is that, once his brands become established in his 
particular territory, he is not at the mercy of a salesman, 
as he would be without private brands. The salesman may 
go to another firm, but he cannot take his trade with him, 
because the retailer feels he must have the house brands, for 
which a demand has been established. 

The jobber does not advertise his private brands to the 
consumer by means of general consumer advertising, as the 
manufacturer of a single item does. If he did, much of his 
advertising would be wasted. The jobber's method is to adver- 
tise to the retailer through the grocery papers, to circularize 
his particular territory, and to promote sales through his 
traveling salesmen. In short, the methods of both manufac- 
turer and jobber differ, of necessity, because of the nature 
of their business organizations. 

Finally, the manufacturer, with his special brand, and the 
jobber, with his private brand, will dwell in peace if they play 
fair with each other. Each has his rights in business equity, 
and each has the means of protecting himself from the unfairness 
of the other. The private brands, however, are here to stay. 
There will be more before there are less, and we may be certain 
that the quality of the jobber's private brands will continue 
to improve. S. W. Roth. 



228 ADVERTISING AS A BUSINESS FORCE 

From the manufacturer's standpoint the great trouble with 
the private brand, of course, is the fact that the producer 
loses control over his distribution to a degree almost ex- 
actly proportionate to the success of the jobber's 

Roc^ " private brand exploiting campaign. One of the most 
Manufac- ingenious methods ever employed by a manufacturer 
PI ^nned to ^^ redeeming the control of his product from a chain 

Reclaim of private brand outlets is found in the case of the 

B ss General Roofing Company. This concern took on 
one contract after another to supply roofing to 
jobbers for sale under a private brand until it found that, 
while it was producing enormous quantities of roofing, the sale 
of it was practically all under trade-marks owned by jobbers. 
The clever method by which they put a blanket plan of trade- 
mark control over their entire output is told in the following 
story, written by Frank T. Hill: 

. . . *The company had been making roofing for a good 
many years, and had built up three separate factories with an 
output of roofing materials of large dimensions. This had 
been done by trade-paper advertising and direct work on dealer 
and jobber. The bulk of the output went to the consumer 
under jobbers' private brands. 

Now, when it was proposed to advertise direct to the con- 
sumer and tell him some plain truths about roofing, the question 
naturally arose, "What roofing are we going to advertise.'" 
Obviously, to go to the consumer with a new brand of roofing 
or simply to push the General Roofing's trade-mark — a polite, 
military gentleman with his hat in his hand — would be to 
start competing with the company's own customers. The 
jobbers who were selling the company's goods under their 
own brands could be depended upon to object, more forcibly 
than delicately. They could hardly be expected to favor an 
educational campaign which, while imdeniably telling the truth 
about roofing as they saw it, yet directed the consumer's atten- 
tion toward some other brand. 

To go to the consumer with a new brand of roofing luojuit, 



*Printers Ink, February 29, 1912, p. 100. 



ADVERTISING AND THE WHOLESALER 229 

simply and brutally, to sacrifice a large portion of the company's 
business. Not to go to the consumer meant that the roofing 
concerns which icere doing so would make off with a comfortable 
slice of it. It looked for a while as though it was Hobson's 
choice, and that the loss would have to be pocketed in the end. 

The General Roofing concern was right in the position in 
which a great many manufacturers of private brand goods find 
themselves. There was plenty of consumer good-will attached 
to the company's products, yet mighty little, if any, to the 
company's own trade-mark. The consumer knew this brand 
or that brand which belonged to this or that jobber, but he 
didn't know anything about the manufacturer of the goods. 
Each individual jobber could buy somewhere else and still 
keep his brand and the good will adhering to it. Consumer 
advertising which could take advantage of the good will already 
belonging to the several brands would be a success. Adver- 
tising which sacrificed this good will at the start would have 
a long row to hoe, if it didn't fall down completely. 

A way was finally found not only to reach the consumer 
effectively, but also to get the benefit of what prestige had 
already been attained by the jobbers' brands. 

The first step was to coin a name which could be applied 
to all roofing of the company's manufacture, no matter under 
what brand it had been previously sold. The words "certified " 
and "guaranteed" were combined so as to form the name 
"Certain-teed." A label was designed with this word featured 
prominently — leaving off the manufacturer's name, however 
— which was called the "Certain-teed label." When this 
label was afiixed to a roll of roofing, either a jobber's brand 
or the manufacturer's own mill brand, it provided something 
to advertise which would not conflict with any existing arrange- 
ments. The company did not advertise General roofing, or 
any jobbers' brand of roofing, but "Certain-teed Roofing," 
which is the same thing, with a difference. 

The Certain-teed label was not given the jobbers or retailers 
to paste on the stock they had on hand. This prevented it 
from "accidentally" getting on roofing material made by some 
other manufacturer. Each salesman was given a supply of 
the labels with instructions to personally paste them on any 
of the " General's " rolls of roofing which he found in the jobbers' 
or dealers' hands. 

Beginning the first of the year, this label was pasted on 



230 ADVERTISING AS A BUSINESS FORCE 

each roll shipped from each mill. It stood for the manufac- 
turer's responsibility, the quality of the goods, a guarantee 
of the process of manufacture: While the jobber's private 
label stood for the service the jobber renders to the retailer- 
price, quick delivery, extension of credit, etc. 

The second step in the campaign was to mail to every jobber 
in the country — whether or not he handled the General's 
Roofing — a large illustrated, descriptive circular, and enclosed 
with it a similar circular directed to the dealer and a booklet 
for the consumer. The consumer's booklet was bound in 
the middle of a large circular to the dealer. 

In the jobber's circular it was explained that here was a 
campaign that was entirely different from anything that had 
ever been attempted before. In it the "Certain-teed" label 
was reproduced and the jobber was thoroughly impressed with 
the fact that this campaign was carried on entirely for his benefit. 
His attention was called particularly to the circular enclosed, 
which was being sent to the dealer, also the consumer's booklet. 

In this circular and through the salesman the jobber was 

impressed with the fact that this Certain-teed label, in addition 

to his oivn private brand, would standardize the roofing 

Roofing and give to his private brand an added value both in 
^Sets of' ^^^ &yGs of the dealer and consumer; that the Cer- 

Brands tain-teed label was constructed in such a way that the 
identity of his private brand would not be lost nor 
interfered with in any way. 

In the circular to the dealer twelve of the advertisements to 
the consumer were reproduced and the keynote to this circular 
was, "How the 'General' will help you sell more roofing." 
The Certain-teed label was featured very prominently, and by 
illustration and copy the dealer was given a good reason why 
he should buy from the jobber instead of sending orders direct 
to the mill. 

The campaign to the consumer in the farm publications and 
mail-order papers was explained in detail. The dealer was 
told that the "General" was with him in his fight against 
mail-order competition; that it was intended to fight fire with 
fire, and the "General's" advertisements would appear in the 
same publications that the mail-order houses were using to sell 
roofing; that in each and every advertisement the consumer 
would be advised to buy roofing from his local dealer. 

The Certain-teed label was featured, and in many ways the 



ADVERTISING AND THE TVTHOLESALER 231 

prospective customer was shown how and where he could use 
Certain-teed roofing, in rolls or shingles. After this came an 
illustrated article entitled, "Let us take a picture trip through 
one of the 'General's' mills." 

This part of the copy was devoted to good, strong reasons 
why the "General" made a better roofing at a lower price, 
rather than to a technical description of how ready roofing 
is manufactured. On the pages that followed this were illus- 
trated the different grades of the "General's" brands, and it 
was explained that this same grade was being sold throughout 
the country bearing jobbers' private brands, in addition to 
the Certain-teed label. 

In the closing copy the prospective customer was urged to 
buy Certain-teed roofing from his local dealer, and gave a num- 
ber of good, strong, substantial reasons why he should do so. 

In the advertisements in farm papers the Certain-teed label 
and the booklet were featured very prominently; in addition 
to this the copy was to carry with it a plan of education along 
two lines, namely, to show that the various tests often applied 
to roofing were "nonsensical rot," and also, by illustration and 
copy, to point out to the man living in the small town as well 
as the farmer a hundred different ways in which he could use 
Certain-teed roofing which he had never before thought of. 

The copy, which was placed by the Mahin Advertising 
Company, ran from full page down to three inches single 
column. In the larger advertisements a coupon was used to 
make it easy and convenient for prospective customers to send 
for the booklet, which was offered free. In the smaller adver- 
tisements the booklet was illustrated. In each advertisement 
the trade-mark figure of the " General " appears and the Certain- 
teed label — in many instances the Certain-teed label being 
shown on a roll of roofing. 

Six of the best salesmen — two from each mill — were 
formed into a "Flying Squadron." These men travel under 
a roving commission, covering the country from one end to 
the other, and work with jobbers and dealers at each point 
where the trade-promotion manager, James C. Woodley, feels 
they can be used to the best possible advantage. 

The efforts of the sales force are also being supplemented 
by a vigorous educational campaign to the dealer and jobber 
in the trade papers. 

If the campaign, which has started well, proves a success. 



^32 ADVERTISING AS A BUSINESS FORCE 

it will go far toward solving a perplexing problem, and will 
show one way at least whereby a manufacturer need not sacri- 
fice trade already secure by "going over its head" to the 
consumer. 

WHEN THE JOBBER APPEALS TO THE CONSUMER 

The results which the jobber can accomplish when he actually 
undertakes to aggressively push any line need no demonstration. 
But the case of the development of the American business in 
"Steero" as told by Charles W. Hurd may be useful in suggest- 
ing methods of doing this kind of work. This case also shows 
that, so far as ingenuity and skill in exploiting and marketing 
goods are concerned, the wholesale distributor may be on a 
footing quite as sound as the producer of the goods : 

*The unusually rapid distribution of "Steero" Bouillon 
Cubes is chiefly explained by the very fortunate connection 
which the manufacturers, the American Kitchen Products 
Company, have with a leading jobbing firm in the drug line, 
Schieffelin & Co., of New York. If it had not been for this, 
all of the excellent magazine copy which has been put out wuth 
sampling offer attached, all of the demonstrations which have 
been made, all of the well-built dealer and consumer literature, 
and other work on the trade would have fallen far short of 
the present results. With the close co-operation of this jobber, 
and in consequence of its reputation, a thoroughly national 
distribution has been secured for this food novelty in less than 
three years and the manufacturers are now ready to proceed 
to the next step of intensification. 

"Steero" has for many years enjoyed a large sale abroad, 
particularly in Germany, where it originated. Carl W. Rade- 
macher, the original manufacturer of bouillon cubes, who made 
a large fortune from them, came here in 1907 to introduce 
them, and spent two years in a comparatively vain attempt 
to make headway. In 1909 his American rights and properties 
were taken over by the American Kitchen Products Company, 
of which Henry S. Livingston, secretary of Schieffelin & Co., 
is also secretary, and the rest of the story is plain. 

*Printers' Ink, January 25, 1912, p. 24. 



ADVERTISING AND THE WHOLESALER 233 

"Steero" bouillon cubes are "distributed and guaranteed" 
by Schieffelin & Co. This operates to great advantage not 
only in the drug line, but in the grocer3% delicatessen, retail 
liquor and candy store lines, to all of which "Steero" goes, 
for use in the home, at the soda fountain, bar, and on outings. 

The connection with Schieffelin & Co., is not permitted to 

work to the disadvantage of other jobbers in the drug line. 

All orders taken in any way are turned over to the 

"Steero" dealer's jobber. But the Schieffelin national selling 

Exploited machinery and influence were put squarely behind 

Jobbing ^^^^ "Steero" proposition and it has helped as hardly 

House anything else could. The " Steero " people have been 
able to turn over all the responsibility for taking care 
of the drug trade to the jobber and have only found it nec- 
essary to detail the grocery, delicatessen, and candy stores, 
which they are doing at the present time. 

With a national distribution assured in a short time, though 
not perfected, through the jobbers, the American Kitchen 
Products Company began to advertise. It went first into the 
woman's magazines and the weeklies, taking small space in 
the beginning, generally thirty and sixty lines. 

"Steero," being the original bouillon cube in this country, 
the task that fell to the original copy was to educate the public 
to the use of the cubes. Bouillon had previously been sold 
in bottles, from which it had to be measured out in a spoon 
for use. "Steero" cubes promised an advance over this. All 
that was necessary to do was to drop a cube in a cup and pour 
boiling water over it. It was the acme of simplicity. 

So the early copy pointed this out in picture and print. The 
cup was shown with the cube in it, dissolving under a stream of 
hot water issuing from the spout of a kettle. Sometimes larger 
space was taken to show the operation in a series : The package, 
the cube, the fingers dropping the cube into the cup, and the 
stream of boiling water dissolving the cube. 

Having explained the method of use (with the valued assist- 
ance of a number of competitors) the copy next proceeded 
to explain the variety of uses. W^hile necessarily retaining the 
cup and boiling water idea, last year's advertising copy painted 
in human interest backgrounds: How "Steero" is served at 
afternoon teas, how it cheers after a long walk, how used by 
automobilists, by yachting parties, how served at soda fountains 
in drug and candy stores and how given to children; all these 



234 ADVERTISING AS A BUSINESS FORCE 

various uses are pictured in an interesting way with wording 
to match. 

At the same time that this style of copy was being developed, 
another need developed. Competition having arisen along this 
same line, it became necessary to identify the name more closely 
with the product. This was done in part by incorporating 
the package in the advertisement and in part by picturing the 
bouillon served in a cubical cup. It may be possible to get 
names like "Steero," or paraphrase the slogan, "a cube makes 
a cup," or assimilate the package, but a patented cup cannot 
be reproduced, and the "Steero" people, for this purpose, 
have taken out a patent on the cubical cup. They have ordered 
a large lot of these cups from Germany and will put them out 
to drug stores and candy stores for serving "Steero." 

All of the advertising carries an invitation to send for free 
samples. With these samples there go back to the inquirer 
a letter asking her to order from her grocer or druggist and 
a descriptive folder. The inquiry is then sent to the dealer. 
The free samples distributed in this way have developed a de- 
mand in very quick time. 

The original magazine list has been largely increased since 

1909. In addition to the woman's magazines and 

^^'^ , the weeklies of large circulation, the advertising has 

Jobbers g^j^g Jj^^q many general magazines and class pub- 
Mediums Hcations, as those for children, for outdoor enthusiasts, 
yachtsmen, actors and actresses, etc. 

At the same time that the list has grown, there has been 
an increase of space. "Steero" has grown from thirty lines 
to a page, even a page at times in the Ladies' Home Journal 
and the Woman's Home Companion. 

The newspapers have not yet been utilized as a medium, 
except in one recent instance, for the reason that the perfection 
of a general distribution has been first sought. Now that this 
has been practically accomplished, the development of local 
territories may be expected. 

The sole exception when "Steero" advertising has gone into 
the newspapers was during the two cold snaps in January. 
On these occasions small double column ads were run in some 
of the New York papers to inform the metropolitan public 
that "Zero weather is 'Steero' weather." 

In New York City, street-car cards are displayed in several 
of the surface lines and more will be taken on later. The cube 



ADVERTISING AND THE WHOLESALER 235 

idea has been worked out in a somewhat humorous way in 
some of these. 

The dealer and consumer hterature in support of this adver- 
tising campaign is unusually good. It is not elaborate so far 
as typography and paper go; the elaborateness is rather in 
the direction specializing the interest of each line of trade. 
There is a folder for the drug line, another for the confec- 
tion store, another for the retail liquor dealer, another for 
the grocer, and still another for the consumer, the latter both 
for mailing and for store distribution by the dealer. The 
folders are small and tell the whole story with picture and 
description in a minute or two. That is what makes them 
valuable. 

The usual dealer helps have been furnished in the shape of 
handsome hangers for store and window. No special attention 
has been given window display until recently, no pressing, 
necessity having previously been felt for it. 

The time has now arrived, however, when more intensive 
work is advisable, and for this purpose several distinctive 
pieces of window display material have been prepared, one set 
of moving pictures, another of folding window cards, and an- 
other, a large cube. 

One of the greatest helps to the advertising and selling cam- 
paign has come from the demonstrations. These are given 
in the grocery departments of the great department stores, 
in groceries and in drug stores. Often there are as many as 
fifty of these going on at once, in cities all the way across the 
continent. Samples and literature are given out at the same 
time. 

Sometimes it pays to work a "stunt." A good "stunt" 
probably always pays. At any rate, the "Steero" people are 
working an ingenious "stunt" and it is very effective in getting 
attention and provoking interest. The name "Steero" comes, 
of course, from the word "steer." So the "Steero" people 
took a couple of what, in the back country, are called "likely 
beef critters," hitched them up to an old-fashioned cart, put 
on this a mammoth facsimile of the "Steero" bouillon cube 
and sent this outfit traveling through the country to give 
away free samples and literature from house to house. As 
slowly as it moves, and limited as its "circulation" is, it never- 
theless has proved a very profitable advertising medium, with 
results easily traceable to it. 



236 ADVERTISING AS A BUSINESS FORCE 

THE jobber's relations WITH THE MANUFACTURER 

One other phase of the jobbers' operations which is no less 
important than any of those already mentioned, is the whole 
group of problems involved in the jobbers' relations to the 
manufacturer whom he still continues to serve. It is perfectly 
clear that all of these defensive methods adopted by the jobber 
bring him into direct competition with the producer, so that 
if he still continues to serve the manufacturer or producer 
he is put in the rather embarrassing position of competing 
with his employer. This introduces a new problem — the 
preservation of genial and profitable relations between these 
two factors in the distribution system which have been thrown 
into somewhat strained relations. 

An opinion of the jobbers' methods of meeting these new 
difficulties in the grocery trade is expressed in the following 
terms by a manufacturer. This manufacturer is not named 
in the article quoted, but the text shows him to be a manufac- 
turer of a package grocery product selling at a fixed price. 

. . . . *When a manufacturer, therefore, has created 
a product, linked it with his name, introduced both to the 
public, and then places the distribution of that product in the 
hands of the jobber, it would seem that the function of that 
jobber should be to loyally attend to its distribution and to 
demand and receive in return a fair recompense. If a manufac- 
turer fails to pay the jobber a reasonable profit, that jobber 
ought to have the same right that any unpaid servant has, 
"to quit and go elsewhere." We do not think that a manufac- 
turer ought, in fairness, to require a jobber to consent to an 
exclusive contract. We have never objected to having a jobber 
sell other brands than our own, so long as he did it fairly and 
allowed the law of competition to take its course. But when 
the jobber is fairly treated (as profits go) and deliberately 
creates and pushes, as his own, a rival brand, we think he not 
only displays poor loyalty, but, in the very nature of things, 
destroys his own value to the manufacturer as a safe and 
trustworthy distributor. 

*Pnniers Ink, September 22, 1910, p. 29. 



ADVERTISING AND THE WHOLESALER 237 

"In determining the adequacy of profit, I think it fair that 
the jobber should take into consideration the relative sal- 
ability of goods. It is figured broad and large that it costs 
7 per cent, for a jobber to do business, and the average jobber's 
profit on specialties is about 10 per cent. If an article is heavily 
advertised, and, therefore, sells with little effort and commands 
large sales, a jobber could well afford to handle those goods 
at a smaller percentage than he could unadvertised goods 
which are difficult to sell, and which move so slowly that his 
capital remains dead and locked up unprofitably. 

In response to your third question as to what jobbers are 
doing to get in wrong with manufacturers and retailers, let 
me reply that some of them are doing almost everything imag- 
inable, though most of them appear to be acting pretty decently. 
Personally, I am disposed to think that the jobber's short- 
comings are not born of "pure cussedness," but rather from 
shortsighted conceptions on one side and under the lash of 
strenuous competition on the other. He is pretty apt to grasp 
the "nimble sixpence" without much regard to its ultimate 
effect upon healthy trade conditions. 

From the standpoint of the manufacturer — take our- 
selves, for instance — the profit to the jobber on our goods, 
figured on his cost, is 12 per cent. If some private 
M% ^* brand manufacturer demonstrates to him that he can 
of Profits niake 20 per cent, on an imitation, he is quite likely 
to forget loyalty to us; forget that a support of our 
policy would conduce to his own ultimate welfare; forget 
that our goods sell easily because of advertising, whereas his 
own would require much effort; forget that the advertised goods 
would turn over oftener and make a greater profit in the 
course of the year. He sees only the extra percentage in the 
private brand. He totally fails to recognize any moral phase 
of the question of his own obligation to the principle of reci- 
procity as a broad constructive force. Similar logic determines 
his attitude, in many instances, to similar competitive articles 
which he carries in stock. To his mind, too often, "the goods 
that pay a profit are those which pay an immediate profit, 
on paper, without regard to the ultimate effect." 

From the standpoint of the retailer the jobber's chief 
malefaction lies in his willingness to sell certain large buyers 
whom the retailer regards as consumers. Too often the jobber 
thinks that "everything that comes to his net is fish," and he 



238 ADVERTISING AS A BUSINESS FORCE 

would as soon take orders from the hotel, boarding-house, 
steamship line, mining camp, and institution as from the retailer. 
I think this constitutes the sorest spot in the chafed relation 
of jobber and retailer. . . . 

The manufacturing jobber is in a somewhat weak position 

since he occupies a position of comparatively inconsequential 

minority as compared with the entire jobbing equip- 

W k^ ess i^^^t- ^or instance, in Chicago there are probably 

in the seventy-five jobbers, and yet we have only been 
Position of obliged to cut off two of them for unfair competition. 
the Manu- New York has about forty, yet, when we cut off the 

jXh"f ^^^° biggest ones for unfair trading, the business was 
entirely absorbed and an increase of 21 per cent, made 
through the extra efforts of the other thirty -eight . 

"It would, therefore, appear that the competitive jobber 
can easily be dispensed with by the manufacturer who has the 
courage to drop him as a reliance. Even suppose, in a certain big 
city, that all the jobbers were to rebel against a manufacturer's 
protective measures. Within the confines of a single city 
it would be very simple for that manufacturer to meet 
the situation by conducting his own jobbing house for 
that territory — or several manufacturers in co-operation — 
and depend upon the local jobbers to take care of outside 
territory. 

Of course, when a jobber is cut off by a manufacturer he 
can always get plenty of imitation goods, whose manufacturers 
are ready to jump into the gap, but no jobber of any standing 
likes to refuse orders on the plea that he is unable to get the 
goods the retailer wants. It seems to us, therefore, that the 
manufacturer has the upper hand, and there is considerable 
evidence that reputable manufacturers are disposed to take 
advantage of it in checking the unfair competition of the 
manufacturing jobber. 

You ask how we meet the reported objection that the 
grocery man cannot get a living margin of profit on advertised 
brands. My answer is "by giving him a profit and then com- 
pelling him to keep it." Goods sold on our schedule pay the 
jobber 12 per cent, and the retailer almost 30 per cent., which 
is ample. We very rarely have complaints of small profits, 
especially because the goods turn over so quickly as to make 
an aggregate profit that is very acceptable. The argument 
that advertising cuts down profits is not borne out in our 



ADVERTISING AND THE WHOLESALER 239 

experience, because our cost of advertising amounts to only 
five eights of a cent per package on the average. 

You ask what is to be the outcome of certain tendencies 
in the distribution field. This is as much a puzzle to us as 
to you. In some thickly congested sections the chain-store 
system will probably thrive, and, of course, beget more and 
more buying exchanges in retaliation. Such buyers seeking 
preferment would naturally push the brands that they can 
buy on a jobbing basis, but so long as a manufacturer maintains 
his advertising and demand, we hardly think they will be able 
to altogether get along without the goods. 

Buying exchanges and chain stores do not altogether elimi- 
nate the jobbers in making their purchases, and they never 
can and never will. The extent of their preferences will be on 
a comparatively few lines, and the claim that such big systems 
as Butler's, and the A. & P., or the Acme Tea Company of 
Philadelphia are "Great Temples of Economy "is not true, as 
applied to the entire stock a grocer ought to carry, nor will it ever 
be true. We have been able to keep up our volume even in 
their territory, though we recognize we lose a large part of the 
distributive power. 

If the manufacturer accepts as an established fact the use- 
fulness of the jobber in the distribution of all or part of his 
products, the question is soon forced home upon him, how 
he is to make the jobber work the market at something like 
its real capacity. Manufacturers through national advertising 
have had a taste of what results can be secured from intelligent 
product-pushing, and they are inclined to insist that any jobber 
handling their goods shall render to them as aggressive distri- 
bution service as they believe they could secure if they were to 
undertake to distribute the goods on their own account. The 
following story tells how one manufacturer induced reluctant 
jobbers of his district to take hold of his goods and push them 
with genuine enthusiasm: 

*Texas jobbers of groceries have resisted stoutly the efforts 
of manufacturers to enlist or force their co-operation in dis- 

*Sijstem, April, 1911, p. 412. 



240 ADVERTISING AS A BUSINESS FORCE 

tributing trade-marked goods. The margin of profit on foods 
nationally advertised is, of course, smaller than on the package 
lines which wholesalers can buy unbranded or market under 
their own names : to exploit these and keep trade-marked articles 
in the background has been the policy of many of the strongest 
houses in the Lone Star State. 

To meet this condition and secure general distribution at 
a stroke, the sales manager of a large food company recently 
planned and executed a campaign which carried both jobbers 
and retailers by storm and placed enough of the house's special- 
ties to supply the state with breakfasts for a good many 
months. 

For its launching he selected the week when the jobbers 

were meeting in state convention at Dallas. From various 

selling districts in the South and Middle West, he 

Forcing drafted thirty-eight energetic road men and ordered 
the Jobber them to report to his assistant manager at Dallas on 

Reiailer ^^^^ Sunday preceding the convention. For their 
Campaign accommodation he took almost an entire floor of the 
best hotel and prevailed on the manager to provide 
a huge round table in the dining-room, labeled "For Pee- 
Kay salesmen.' "Pee-Kay" isn't the name. The title the 
placard bore is known to very nearly every man and woman 
who sells or eats breakfast foods in the United States. 

Before the assistant manager led his company in for Sunday 
evening dinner, the big table and the reserved fifth floor had 
stirred the curiosity of every guest in the hotel. Many of the 
latter were wholesale grocers already on the ground: not one 
of these who was acquainted with the assistant manager — 
he had in the past labored vainly with most of them — but 
stopped to shake hands and ask the meaning of the assembl3\ 
To all the manager explained the company's purpose to call 
on every retail grocer in Texas during the coming week and 
back up their selling efforts by advertisements in the newspapers. 
Half a dozen of the most influential he asked up to the fifth 
floor to address the salesmen at their evening meeting. 

Acceptance of this invitation was inevitable. The boldness 
of the concerted attack, the number and vigor of the men who 
were to execute it made some measure of success a certainty. 
The jobbers realized the value of making an impression on these 
young men, by whom orders might be turned in their direction 
or otherwise. They climbed — such as were asked — into the 



ADVERTISING AND THE WHOLESALER 241 

"Pee-Kay" band wagon and promised their co-operation. 
They approved the advertisements the assistant manager 
exhibited and handed around in proofs upstairs. If a demand 
could be created for "Pee-Kay" flakes and oats and biscuits 
in Texas, they were there to supply it. And the assistant 
manager, as the enthusiastic meeting drew to a close, sized 
up his thirty-eight men and promised the demand would be 
created. The salesmen had caught the spirit of the invasion 
game, a fight and a frolic as well as hard work lay ahead of them. 

Ten of the men assigned to the most distant territories — the 
assistant manager had laid out routes for each during his weeks 
of preparation — were scheduled to leave on early trains Mon- 
day morning. These the other twenty-eight conducted to 
their trains after breakfast in a joyous procession that stirred 
up the town, attracted the interest of the newspapers and 
informed arriving grocers that "Pee-Kay" salesmen were "on 
the job." 

To the newspapers, on a dull Monday morning, the parade 
and the plan behind it was a feature not to be overlooked. 
Any Texan's pride would respond to the fact that it took thirty- 
eight star salesmen to cover his big state; so they proceeded 
to touch it. The grocers' convention was important, but the 
"Pee-Kay" invasion and its purpose were given almost as 
much attention in the afternoon editions. Marked copies 
of these, the assistant sales manager and the salesman assigned 
to Dallas, mailed — in wrappers previously prepared for just 
such use — to all wholesalers and retailers and every newspaper 
in Texas the same evening. Meanwhile, in dwindling pro- 
cessions the salesmen had marched down to the trains which 
would land them on their respective firing lines next morning. 

The demonstration made its impression on the jobbers, 
on the retailers, on the newspapers of the state — the majority, 
because of the novelty and the sale of the advertising, noticed 
the campaign in some way — on buyers of breakfast foods 
and on the salesmen themselves. It illustrated capitally the 
virtue of concentration, organization and publicity. Thirty- 
eight salesmen might work a month unnoticed in half the space 
Texas fills; give them a flying start, however, the sense of con- 
certed effort, the stimulus of competition, and the consciousness 
of the public eye, though only for a moment, and they become 
a force whose efficiency is quite beyond ordinary measure. 
At least, this was true in "Pee-Kay" experience. 



242 ADVERTISING AS A BUSINESS FORCE 

Ten days sufficed to sell 90 per cent, of the retail grocers 
of the state. Then, perforce, the jobbers fell into line. While 
consumers, reading the newspaper advertisements with some 
notion that special doings were afoot, brought a touch of per- 
sonal interest and curiosity to the matter and clinched the 
whole thing by demanding and buying "Pee-Kay" products. 
So successful, indeed, was the campaign that it will be repeated 
at intervals when slack seasons in well exploited territories 
release salesmen for new "flying squadrons," to work backward 
fields. 

WHEN MANUFACTURERS APPEAL TO THE CONSUMER 

Appeal to the consumer by the manufacturer, in order to 

compel the jobber to be more active in pushing the goods or 

Consumer ^^ forestall the jobber in any attempt to substitute 

Education his own brands for the manufacturer's product, is the 

Private "^^st common of the methods of getting the jobber 

Brand into line. A particularly successful case of this kind 

rou es ^^^ ^^ experience of the Hunt Brothers Co., of San 

Francisco, Cal., fruit canners. J. H. Hunt, President of the 

company, tells the story as follows : 

*We entered upon our campaign to consumers only a little 
more than two years ago. This campaign of education was 
necessary because of the fact that the methods of canning fruits 
in this state were such as to require some strenuous publicity 
to let the public know how they might procure desirable canned 
fruit without running the risk of being disappointed by buying 
private label goods which were invariably recommended and 
sold as the best, when, as a matter of fact, the goods were of 
varying qualities — from fair down to disgustingly poor. 

We knew that the consuming public wanted a better quality 
of canned fruits and felt that they would respond if they could 
be assured of getting the right quality. 

The first year of our campaign was very slow and uphill 
work, our chief difficulty being that we could not seem to get 
the retail distribution. Our goods necessarily were higher 
in price to the trade than the cheaply packed goods that were 

* Printers' Ink, May 9, 1912, p. 8. 



ADVERTISING AND THE WHOLESALER 243 

so freely offered and in such general distribution throughout 
the country under jobber's private label. It was hard to 
convince retailers that they could afford to pay a little more for 
even better goods that must retail at the same price as the 
brands they were carrying. 

The majority of jobbers who took on our line did it with 
apparent intention to sidetrack it and prevent its getting into 
the hands of a competitor. Instead of giving us the support 
they promised and gaining for us retail distribution, most of 
them did whatever they could to prevent distribution, appar- 
ently preferring to carry the goods as dead stock in their 
warehouses rather than permit them to get on the retailer's 
shelves. 

All this time our consumer advertising was going on and the 

constant complaint was that our goods could not be found in 

the retail stores. 

I t^^h ^^ then concluded to send out our own specialty 

Consumer M^n to work the retail trade along with the salesmen 

of the jobbers who were acting as our distributors 

in the various markets. The retailers responded quickly and 

willingly, and we were agreeably surprised to find that instead 

of their unwillingness to pay the difference in price, they were 

not only willing, but glad to do so once they were shown the 

difference in the quality of the goods. 

Our success during the past year, or second year of our 
campaign, has been wonderfully satisfactory and we attribute 
it to the educational campaign carried on with consumers and 
their ready response as soon as the goods began to make their 
appearance in the retail stores. 

We have felt the need of some kind of dealer literature, 
but our appropriation being somewhat small for a national 
campaign, and being so very green in the business of adver- 
tising, we have gotten along with only our consumer advertising, 
coupled with the work of our specialty men with the dealers. 

I might say that our only idea when we started in of what 
advertising might accomplish was gained through our con- 
nection with the advertising of Hawaiian Pineapple, which was 
almost entirely consumer advertising, and, like our fruit cam- 
paign, one of education. The success of that campaign was 
so remarkable that we concluded to enter upon a similar cam- 
paign of education on California Canned Fruits, and while, 
as above stated, our success is not only assured, but very 



244 ADVERTISING AS A BUSINESS FORCE 

satisfactory at the present time, we nevertheless had a very 
different situation to overcome, viz., that of private brand. 

The merchandising condition which our advertising was 
designed to overcome was simply that of reaching the consumer 
with an honest, good quality, making it almost necessary 
to break down the barracks of the private-brand goods, a large 
majority of which were not only disappointing in quality, but 
had the labels claiming the goods to be much better than they 
actually were. 

Our experience has been that wherever we have succeeded 
in reaching the consumer we are winning out handsomely, 
proving conclusively that our contentions were correct that the 
consumers are not looking for cheaper goods, but for better value. 

The best dealer work in our case has been, while expensive, 
the opening of the cans and showijig the dealer the comparative 
quality, side by side with the goods he was carrying. 

ANOTHER manufacturer's APPEAL TO CONSUMERS 

Arthur H. Scott, sales manager of the Scott Paper Company, 
of Philadelphia, is convinced that consumer advertising is a final 
and conclusive answer to private-brand control. The following 
case shows how his company used this weapon. It has some 
striking points of contrast with either the Hunt case or the 
General Roofing case already cited. 

*Just because a manufacturer has been making private- 
brand goods for a number of years is no reason for his going 
on sinking his identity to the end of time. I grant 
The Manu- yQ^ that the apparent title to the goods, as far as 
Chance of ^^^ public is concerned, rests with the jobber who 
Escape owns the brand. I grant you that the same job- 
ber can take the business clean away from that man- 
ufacturer whenever he gets ready to have his goods made by 
somebody else. I grant you all you care to maintain about 
the wastefulness of manufacturing a line of goods, putting 
your thought and your energy into them, and allowing them 
to go to the consumer under somebody else's colors. But I 
maintain that it isn't necessary to keep it up any longer than 
it seems profitable. 

*Printers' Ink, June 30, 1912, p. 30. 



ADVERTISING AND THE WHOLESALER 245 

Three years ago this company was manufacturing approxi- 
mately three hundred different articles, representing the 
accumulation of thirty years of doing business through the 
private-brand jobbers. Each year the jobbers' claims grew 
more insistent; price concessions, more elaborate labels and 
packages, special styles were demanded in ever-increasing 
ratio. Not one of the jobbers was tied to us. If we did not 
accede to their demands they would buy elsewhere — and 
the expense of putting up four or five varieties of a product 
in three hundred different forms was getting burdensome. 
We made up our minds that, if it were possible to persuade 
the consumer to ask for Scottissue or Sanitissue when paper 
towels or toilet paper were wanted we could easily reduce the 
number of styles and do as much or more business. As a 
matter of fact where we were handling three hundred articles 
we are now handling only five, and one year after we made the 
change our business had increased 40 per cent. 

Of course, right at the start, the cutting off of the private- 
brand trade represented a big saving at the production end 
of the business but from the selling end it looked shaky. 
Direct Sale j^. n^gaj^i^ cutting out the jobber entirely, and selling 
Necessary direct to the dealers ourselves. The jobbers who had 
built up a fancy trade in private-brand toilet paper, 
fixing the prices to suit themselves, were hardly to be expected 
to push the same paper under a manufacturer's trade-mark with 
the price advertised to the consumer. And there wasn't any 
use of continuing the private-brand papers and trying to market 
our own trade-marked papers besides. So the jobber had to go. 
We made up our minds that we would sell direct to the retail 
trade, and push the product off the dealer's shelves by adver- 
tising to the consumer. 

Toilet paper is an article in which competition in price is 
remarkably keen, and there were plenty of other papers which 
were quite satisfactory. Therefore it was necessary to make 
something else the leader, create an "atmosphere" which would 
lead people to prefer Scott products, and let the product come 
in sort of incidentally. 

The sort of atmosphere to be created came in for the hardest 
thought. We made up our minds to feature the Scottissue 
towel as the leader. 

Just about that time there was a lot of talk going around, 
in the advertising columns and elsewhere, about "sanitation." 



246 ADVERTISING AS A BUSINESS FORCE 

Some concerns selling through the drug stores were harping 
a good deal upon the antiseptic properties of their goods. 
We believed that there was considerable interest stirred up 
in sanitation, but we thought that where there was one person 
interested in sanitation there were a dozen interested in plain, 
every-day cleanliness. 

Then, too, the arguments for goods as being sanitary or 
antiseptic tend to arouse prejudice on the part of the medical 
profession, because comparatively few products are really 
antiseptic as sold in the average drug store. Every surgeon 
knows how necessary it is to guard against dust, for example, 
if articles are to be kept in a sterUe condition. So the adver- 
tising of goods with those precise terms is likely to give rise 
to an impression of false claims, while to say that the goods 
are clean can offend no one. 

It was this semi-professional atmosphere which we endeav- 
ored to get — to surround the goods of our manufacture with 
the atmosphere of healthful cleanliness. 

Getting '^Yg made a good deal of the various uses of the 
Pro/Sowa/P^P^^ towel, such as for shaving, for polishing win- 
Atmosphere dows, for removing superfluous fat from foods cooked 
in grease, removing moisture from photographic 
prints, etc. In each connection the cleanliness of the towel 
was emphasized, and we were careful to include the statement 
that the towels were snow-white. 

We have used comparatively small space in the magazines 
in the belief that small space in many mediums would pay 
us better than large space in a few. Towels and toilet paper 
are articles which everybody uses everj^ day, but they are not 
of supreme importance. Hence it seemed in better taste, and 
in line with the atmospheric appeal we were trying to make, 
to keep the advertising down where it would not be too con- 
spicuous, yet would be seen. 

Each year, during the automobile season, we have carried on 

a sort of sampling campaign, though the samples are not 

always free. We prepare "tourist packages" con- 

Samvlina Gaining six paper towels, a paper comb, a drinking 

cup, a cake of soap, and a washcloth. The latter is 

separately wrapped in an envelope which carries an advertising 

message — which is not out of place as it would be in a maga- 

azine page. These tourist packages are distributed through 

the local dealer, who buys them at cost to us. Sometimes he 



ADVERTISING AND THE WHOLESALER 247 

distributes them without charge; sometimes he gets a nominal 
price for them — depending upon the recipient in some cases. 
These sample packages are intended for use at country hotels 
where toilet facilities are often inadequate. They have been 
of great value in getting people to ask for our goods. 

In each regular package of goods which we put out we include 
a little booklet in the form of a novelette, which sums up the 
various uses of the product, and carries the sanitary argument 
a little further than can be done in magazine space. The last 
few pages in the book are devoted to advertisements of the 
various lines, together with an offer of the tourist packages 
in quantity for automobilists. Some opinions of physicians 
regarding the germ-carrying properties of common fabric 
towels are included. 

When we discontinued selling through jobbers we divided 
the country into thirty sections. Each section is the head- 
quarters of a salesman, and also a distributing point 
When the for the goods. We have trained our sales force to 

We7e^ talk the goods to a dealer as if they were selling speci- 
Abandojied alties to consumers. Each salesman is filled so full 
of the arguments for the use of our products that he 
cannot help enthusing the dealer. Once a year we have a 
salesmen's convention at the factory, and the men are thor- 
oughly posted on the advertising plans, together with every 
new sales argument. 

The results in two j'ears have exceeded our expectations. 
The first year showed a gain of 40 per cent., and we have been 
going steadily on ever since. 

So the private-brand situation is not hopeless by a long ways. 
Of course the cost of doing business is somewhat higher when 
it is necessary to maintain one's distributing points — I am 
speaking of the average manufacturer — and it is necessary to 
spend a good deal more time and energy training a sales force 
large enough and competent enough to represent the goods. 
But much of this is offset by the added enthusiasm which the 
dealer gains through contact with a man who is interested in 
the particular line of goods — not, like the jobber's salesman, 
spreading his interest thin over a multitude of things. 

And later on, if the business grows to such a volume that 
it is no longer possible to handle one's distribution in this way, 
the jobbers will welcome the line with open arms. A big, 
going business, with the retailers in their territories demanding 



248 ADVERTISING AS A BUSINESS FORCE 

the goods, is worth paying attention to, and no jobber worthy 
of the name is going to cut off his nose to spite his face. 



A MANTTFACTURER WHO DEFENDS THE JOBBER 

Amid all the quarreling with the jobber it is refreshing to find 
now and then a producer who really uses the jobber to per- 
One Mann- ^o^m his proper function and treats him accordingly. 
facturer The Kellogg Toasted Corn Flake Company is the 
Believes classic instance of a grocery specialty manufacturer 
in the who insists that the jobber still performs a service 
° ^^ and that he is worthy of his hire. Andrew Ross, the 
vice-president and sales manager of this company, delivered 
an address before the Central Division of the Associated Adver- 
tising Clubs of America, in Toledo, on June 14, 1912. From 
this address the following paragraphs are taken: 

*Our company has very pronounced ideas of what constitutes 
a square deal to the grocery trade, with which it is closely 
identified. There are those who differ with us. I could name 
the representatives of half a dozen of the biggest interests in 
the trade who would seriously assert that we don't begin to 
know what a square deal means, let alone knowing enough to 
talk about it. The only consolation is that these men are 
greatly outvoted. 

It seems peculiar that the square deal in business should 
strike men as a peculiar policy, and yet such actually seems to 
be the case. As far as I can learn it always has been the case. 
When we adopted the policies which now control the business 
of our company and decided to submit every business problem 
to the square-deal test and to hew closely to the line, the plan 
was derided as being impractical and visionary; but we are 
getting away with it, and with this policy firmly established in 
every feature of our business we have built up as substantial 
an institution as any man's heart could desire. 

Our conception of the square deal is this: That our first 
and most vital purpose is to give to the consumer, the people 
for whom we make the goods, the best food we can produce, 

*Pnnters Ink, July 18, 1912, p. 120. 



ADVERTISING AND THE WHOLESALER 249 

at the smallest price we can profitably accept. That the jobber 
and retailer, who distribute our goods to the consumer, must 
be paid an equitable price for their services, and that every 
jobber is entitled to the same treatment as every other jobber 
and every retailer to the same consideration as every other 
retailer. This does not seem to be a peculiar doctrine, but 
it is, and it has cost us a peck of trouble to establish it. ... 
I can say frankly that I consider the national advertising 
is one of the greatest of all influences, if not the greatest, in the 
development and encouragement of the square deal in business. 
There are several reasons for this. In the first place, national 
advertising has bridged the chasm which has existed in the 
years past between the manufacturer and the consumer. The 
manufacturer now meets his customer face to face and talks 
to him, becomes intimately acquainted with him, studies his 
needs and requirements, and values above all things his friend- 
ship and confidence. He knows that this confidence is his 
greatest asset. Without it his advertising would soon become 
unprofitable and his business would fail. He must give the 
consumer all he has a right to require. More than that, he 
must even measure up to the consumer's fondest expectations, 
and to do this he must watch closely the two main points of 
his business — production and distribution. He must employ 
the best attainable products, the most skilled workmen and 
the most modern and perfect processes. In short, he must 
do everything possible to make a product which cannot fail 
to satisfy the customer. 

Problems of distribution vary with different businesses. 
In the grocery business there are some 350,000 retailers and 
there are some 2,500 jobbers. No manufacturer, it may be 
safely said, can profitably deal with the 350,000 retailers in 
the grocery trade direct. The administration expense of 
carrying this terrific number of accounts on his books, the loss 
in bad debts and the cost of the army of salesmen and collectors 
that would be required would treble or quadruple his cost of 
doing business and add consequently to the burden of the 

consumer. 
Gi^'i^g the J don't know how it may be in other lines, but in 
"%uare ^^^ grocery trade this talk of eliminating the jobber 
Deal" is all plain rot. There is considerable talk in the 

trade of what is called the "trinity of trade," the 
manufacturer-to-jobber-to-retailer chain of distribution. We 



250 ADVERTISING AS A BUSINESS FORCE 

believe in it, and we believe in the jobber and the retailer 
as distributors; and because we believe in the jobber we do 
not sell our goods over his head to preferred retailers. We 
need him as a distributor and so we give him all our distri- 
bution — 100 per cent, of it. There are a great many retail 
stores, particularly chain stores, in the country, to which we 
could profitably sell direct. I use the word "profitably" in 
a limited sense. But when the manufacturer has sold every 
one of these big stores direct he will find that 90 per cent, 
of his distribution is still through jobbers to the great army 
of small retailers. We don't believe in depending on the job- 
bers for 90 per cent, of our distribution and then taking 
10 per cent, of their very best trade away from them. One 
cardinal point of our conception of a square deal in the 
grocery trade, then, is 100 per cent, distribution through 
jobbers. 

But this thing of the square deal is not a jug-handled affair. 
There are two sides to it. If the jobber wants us to play fair 
with him we have a right to expect that he shall play fair with 
us. If he asks the manufacturer of a trade-marked, adver- 
tised brand to entrust 100 per cent, of the distribution to 
him the manufacturer of that trade-marked, advertised brand 
has the right to expect that the jobber will entrust 100 per 
cent, of the manufacturing of that trade-marked brand to 
him. We have no quarrel with honest, straightforward 
competition with other manufacturers, but when the jobber 
goes into the business of distributing his own private brand 
of corn flakes, thus competing with the very interest which 
economically he is supposed to serve, then we certainly have a 
right to a loud and sustained protest. 

We have made that protest. We have made it very vigor- 
ously and we have gotten by with it. We do not sell a single 
case of Kellogg's Toasted Corn Flakes to any jobber marketing 
a private brand of corn flakes. There are just an even dozen 
of them off our books. Some of them are the biggest jobbers 
in the United States. We miss their business and we hope 
they miss ours, but in spite of it all we have to-day what we 
consider virtually a perfect distribution and we are getting and 
giving a square deal. 

We believe in treating every jobber or every retailer exactly 
alike, and accordingly every jobber pays the same price and 
makes the same profit on our goods as does every other jobber. 



ADVERTISING AND THE WHOLESALER 251 

The same is true in the retail trade. We beheve in equal 
rights to all and special privileges to none and have in our 
business no free deals, no quantity prices, no rebates. 
^'■^ p^-^'^j Free deals and rebates are illegal in the railroad busi- 
°'\rices "^^^^ ^^^ people get arrested for giving them if they 
are found out. I believe they are just as great an 
evil in any other line of business, only they haven't been 
legislated against. The free deal is solely a loading device. 
Its one purpose is to load up the dealer with as large an order 
as the traffic will stand. With a perishable product, such as 
a flake food, it seems to us that even if the free deal were not 
wrong in principle it would be a peculiarly fatal policy to adopt. 
We bend every effort in our business toward procuring the most 
normal distribution and avoiding any overstock. To this 
end we have no storage at our factory. Every case of goods 
we make goes direct into the cars. We consider it vital to our 
interests to get our goods into the hands of the consumer in 
the shortest possible space of time. Think, then, of the effect 
of a merchandising practice the sole purpose of which is to load 
up the retailer with as many goods as he can be induced to buy 
— goods which must stand on his shelves for weeks and months 
before they are disposed of, if in fact they are ever sold at all. 

The free deal or the quantity price places a vast advantage 
in the hands of the bi^ store with increased buying power over 
its small competitor. In this way it is a builder of monopolies 
and an enemy of the small dealer. It is an encouragement for 
price cutting and invariably has a demoralizing influence. 

We consider that it is not only the right but the duty of the 
manufacturer of an advertised, trade-marked article to protect 
the selling price of his goods. He is responsible for attending 
to the best possible distribution of his product to the consumer. 
His distributors, the wholesale and retail merchants, cannot 
be expected to give his product the attention which it should 
receive unless they are fairly paid for their services. With 
a non-protected price article price cutting is inevitable; and, 
price cutting being contagious, a sudden epidemic of it is likely 
to be fatal to almost any business. And when the business 
of manufacturing and distributing a desirable article succumbs 
to it, the manufacturer, the dealer, and the consumer are all 
losers. 

These are only a few of the cardinal points of the square deal 
in merchandising, as we see it. It spells better service for the 



252 ADVERTISING AS A BUSINESS FORCE 

consumer and It means the salvation of the small dealer — 
the little store on the corner. . . . 

THE JOBBER AND PRICE MAINTENANCE 

As suggested in this account of the policy of the Kellogg 
Toasted Corn Flake Company, we find that the problem of get- 
ting the jobber to maintain prices is one of the most 
Mainten- serious troubles in the whole distribution system. The 

ance^ and following exccrpts from letters received by a producer 
the Jobber ■• j i. ^ ±. j.i •• i- • 'i 

who undertook to secure the opmion oi various job- 
bers in the hardware trade on the question of price mainte- 
nance suggest the main features of this problem in the jobber's 
work and relations: 

*We suppose that the jobber has as many friends as anybody 
else; otherwise he would not be able to stay in business and 
prosper. 

Neither the jobber nor his friends, however, seem particularly 
anxious to rush into print in his defence when he is assailed; 
consequently we hear all sorts of things about the wickedness 
and uselessness of the jobber without hearing much of the 
other side of the case. 

The jobber is regularly accused of pretty nearly everything 
from the high cost of living to bad crops and an unusually hard 
winter, and every few weeks somebody jumps into the ring 
with the proposition that all jobbers be eliminated. 

In business nothing can persist indefinitely unless it fills 
a useful purpose and does its work well; hence the fact that 
the jobber increases and flourishes in the land is scientific 
evidence, at least, of the fact that he is needed. 

Jobbers are accused, among other crimes, of failing to keep 
their promises in the matter of price maintenance and cutting 
prices recklessly whenever they see fit. 

There has recently come to our attention the result of one 
investigation as to price cutting by jobbers which is interesting 
and which may be typical. 

John Simmons Company, of New York City, are manufac- 
turers of the Baldwin Acetylene Lamp, a lamp for miners, 

*Advertising and Selling, May, 1912, p. 140. 



ADVERTISING AND THE WHOLESALER 253 

engineers, etc. These lamps are handled by jobbers in all 
parts of the country, and the following letter recently sent 
out by the Simmons Company explains the situation with which 
they found themselves confronted : 

Ever since the jobbers have been handhng the Baldwin Lamp we have 
insisted on the maintenance of the resale discount of 25 per cent., but every 
few months an epidemic of price cutting breaks out, first in one section and 
then in another. Sometimes it will break out in the same section two or three 
times, until the conclusion has been forced upon us that the jobbers are satisfied 
with a smaller profit than we supposed they needed in order to successfully 
carry on a profitable business. 

We find that some of the jobbers are satisfied to take orders for, say, half a 
gross or more at $8.50 a dozen, and it occurs to us that it might be advisable 
to rearrange the resale prices on the No. 31, 32 and 33 lamps to $9 a dozen 
on less than half gross and $8.50 on half groes or over. Of course, there would 
be no change in our jobbing prices for the very good reason that we cannot 
afford to reduce our prices and still continue our advertising, and if we did 
lower prices it would only result in further cutting by some jobbers. 

If the jobbing trade are satisfied with that profit on half gross orders, we 
do not see why we should object to their giving the difference to their customer, 
but unless it is the concensus of opinion of the jobbing trade that the $8.50 
price would be satisfactory, we propose to hold to the present resale price of 
$9, and, in order to fulfil our promise to maintain that price, we will be 
compelled to withdraw the jobbers' discount from the jobbers who persist 
in cutting prices. 

We dislike having to take such an arbitrary stand in the matter, but it 
seems that some jobbers will persist in selling goods without carefully analyzing 
their cost of doing business. 

Kindly let us have your views on the advisability of a revision of the resale 
price. 

Yours very truly, 

John Simmons Co. 

Replies from over four fifths of the jobbers to whom this 
letter was sent were received promptly. They were practically 
unanimous in their objection to the change in price suggested 
in the letter from the Simmons Company to them, and in their 
denial of having cut prices or being in favor of that practice. 

These responses developed the interesting fact that the 
price cutting of which the Simmons Company complained 
was evidently due to false rumors started by so-called shrewd 
buyers. The way it worked out was this: When one jobber's 
representative called upon one of the "shrewd" buyers and 
offered Baldwin's lamps at the usual price, he was informed 
that they had been offered by another jobber at a lower price. 

This statement was false but was accepted at its face value 
and duly reported back to the jobber by the traveler. Natu- 



254 ADVERTISING AS A BUSINESS FORCE 

rally the jobber said that if his competitors were offering these 
lamps at the stated cut price, that price would have to be met, 
and in this manner these little epidemics of price cutting bobbed 
up from time to time and in various places, much to the annoy- 
ance and discomfort of the John Simmons Company. 

It is highly probable that this situation often develops in 
other lines of trade. 

There is no way to prevent a liar from lying, but the pro- 
tection of the jobber and of the manufacturer whose goods 
he carries seems to make it imperative that instances of price 
cutting be traced as soon as they are discovered, and that 
the real cause of the cuts be made known and the practice 
stopped. 

Some of the responses received by the Simmons Company 
are quite interesting. We give below extracts from a few of 
the large number which we have been permitted to examine: 

From a Western jobber, Chicago : 

In our own experience we are almost con\-inced that most of the price cutting 
brought to our attention was due to shrewd buying on the part of the merchant, 
or, possibly even to misrepresentation. 

From Strevell-Paterson Hardware Company, Salt Lake City : 

As you know, we have WTitten you several times in reference to prices 
being made our customers at less than $9. We have never been able to 
find out just how low this price has been, but we know it is at least $8.50, 
and it is a question whether it is not lower than that. We have absolutely 
refused, up to the present time, to make any better price than $9. The 
result has been that our business has been dropping off very noticeably on 
Baldwin lamps. It is now a question of what we had better do regarding thi^ 
as this trade should belong to Salt Lake and we naturally are anxious for it. 

From Wolff-Lane Hardware Company, Pittsburgh : 

There is one thing sure, and that is if you deviate from your present estab- 
lished prices and give us the pri\Tilege of selling these lamps at $8.50 in six 
dozen lots, it simply means that some one will go out and sell them at $8.50 
in dozen lots. As long as some of the jobbers will use your lamp as a vehicle 
for getting other business, just so long will these cut prices be cast around. 

We have found one very good way of meeting this question of cutting prices 
and that is, when any of oiu* men report to us that their customers can buy 
Baldwin lamps at less than $9, we ask them to ascertain who is selling them 
at less than $9, but we have ne\-er yet lieen able t(; find any tangible cvidente 
of this having l>een done. 



ADVERTISING AND THE WHOLESALER ^255 

From C. H. Miller Hardware Company, Huntingdon, Pa. : 

We do not think that $9 per dozen is too high a price, but the price has not 
been maintained. 

If yon can adopt some way by which you can hold the jobbers to the price 
of $9 we think it would be very much indeed to your advantage, and you can 
depend upon our hearty co-operation. 

Kane & Keyser Hardware Company, Belington, W. Va. : 

Past experience would lead us to believe that if you permitted jobbers 
to make price of $8.50 per dozen on six dozen lots or more, that they would 
take on a customer who would for one time buy six dozen in order to get this 
price; then perhaps he might persuade his jobber to sell him smaller lots at 
the same price, and, if this jobber refused to do so, perhaps he would tell some 
other jobber's salesman that he was buying from Mr. A. at $8.50 per dozen, 
and he would expect the same price from any one else; so that the price would 
be kept down to $8.50 per dozen. 

From Simmons Hardware Company, St. Louis : 

We are unable to conceive the idea of a jobber who is willing to sell Miners' 
Lamps at $8.50 based on the costs that you charge us. This company is not 
willing to sell the goods at $8.50 based on the present cost and request that 
you maintain the price of $9, and see that the other jobbers maintain it. 

House-Hasson Hardware Company, Knoxville, Tenn. : 

We find that the great trouble resulting from resale prices is that the manu- 
facturer will allow some two or three jobbers to cut the price, still trying to 
have the smaller jobbers maintain it. We would suggest that instead of 
yom- reducing your resale price to $8.50 per dozen that the parties who have 
been guilty of selling lamps for less than $9 per dozen, that you advance 
your price to them to $8.50 F. O. B. factory, and if they continue to sell at 
$8.50 from stock would suggest that you charge them $9.50. 

We think if you would ask the Colts Pat. Fire Arms Mfg. Company regarding 
restricted or resale prices that they would advise you that there is only one 
way to have these maintained, and that is when any jobber violates it to dis- 
continue selling him. While we are now handling several lines which are 
sold on resale price, but we must say that we find the Colts Pat. Fire Arms 
people about the only concern we know of that are having the resale prices 
maintained, we could mention several manufacturers who pretend to have 
resale price but it is all a joke, as they allow some of the largest jobbers to 
do just as they please. 

REVIEW QUESTIONS — CHAPTER VIII 

1. What changes in distribution are causing a reorganization 
of the wholesale trades? 

2. W'hy is the wholesaler so often on the defensive? 



^56 ADVERTISING AS A BUSINESS FORCE 

3. What are the three main methods of distribution for 
retail goods? 

4. How does direct buying by retailers affect the manufac- 
turer? 

5. How does Mr. Wilson say the cost of direct selling com- 
pares with the cost of selling through the jobber? 

6. How did the General Roofing Company reclaim its trade 
from private-brand control? 

PROBLEM QUESTIONS CHAPTER VIII 

1. T\Tiat measures has the jobber adopted in defence of his 
existence? Was he justified from: (1) His own standpoint, 
(2) The manufacturer's point of view, (3) The standpoint of 
the final consumer? 

2. What are the main arguments for and against the "private 
brand"? As a consumer have you any preference for a manu- 
facturer's brand as against a jobber's? Granting equality of 
product would you prefer Armour's bouillon cubes, or "Steero"? 

3. Mr. Roth in his letter declares that all will be well if the 
manufacturers and private branders will "play fair with each 
other." What does this involve? Is it possible? 

4. Would the General Roofing Company's plan apply in 
the case of a fruit canner? 



CHAPTER IX 

THE MANUFACTURER AND HIS ADVERTISING PROBLEMS 

THE theme about which this compilation of experience 
records has been made is the interrelation between 
advertising and distribution. Step by step we have at- 
tempted to show by illustrations some of the ways in which the 
consumer and the various parts of the distribution system have 
been affected by the achievement of various advertisers. 

We now come to the most complicated group of problems 
in the whole series — the problems of the producer of the 
goods. In many cases, in fact in all cases where the maker's 
identity is not lost, the producer is the originator of the adver- 
tising activity, if it is at all wide in scope. And in this case 
he necessarily remains at the centre of the advertising plan 
throughout its execution. But whether the advertising origi- 
nates with him or with some factor in the distribution system 
lying between him and the consumer (as in the case of private 
brands previously discussed) his problems are affected by it 
and must be adjusted to it. 

The manufacturer who controls his distribution has three 
separate fields of activity: buying his raw materials, manufac- 
turing his product, and selling the goods which he produces. 
If, therefore, we accept advertising as one of the most powerful 
factors for influencing the size and kind of consumption, it 
obviously has a direct bearing on all three of these branches 
of the manufacturer's activity. 

RELATION OF ADVERTISING TO PRODUCTION PROBLEMS 

Looking over the list of really successful manufacturers' 
campaigns, we find that it is coming to be more and more 

257 



258 ADVERTISING AS A BUSINESS FORCE 

generally recognized that advertising plans yield most satis- 
factory returns when they are drawn up with a clear conception 
of their place as an integral part of the manufacturer's entire 
policy and are not made merely an adjunct of the distribution 
efforts. In other words, the great campaigns are those in which 
advertising has been considered in its relations to the product, 
the market, and the distribution system. 

The following cases, described by Lynn G. Wright, Managing 
Editor of Printers' Ink, make clear the interrelation between 
advertising and production problems. 

J. M. Brock, sales manager of the William Crane Com- 

Adjvsting pany, of New York, makers of gas burners and gas 

Sales and supplies of various kinds, voiced the sentiment of 

Production others when he said that the problem of adjusting 

sales to factory capacity was very serious. 

"When the factory begins to fall behind I lose the value of 
my men, who are kept at home. I lose the value of my adver- 
tising. I purposely write advertising so as not to pull inquiries, 
and unavoidably one becomes listless in following up inquiries. 
I thus lose some of the good-will of dealers whose orders cannot 
be filled even within three months." 

Mr. Brock believes that there never can be an exact adjust- 
ment of selling efforts to factory production. It is possible 
only approximately to make the estimates of factory production 
jibe with the estimates of sales. The factory superintendent 
naturally desires to get the most possible out of his force and 
inevitably tends to push production. Selling what he makes 
is a function which belongs to another world. Similarly, the 
sales manager, with a full corps of salesmen and with a heavy 
appropriation for advertising, goes the farthest possible in 
developing demand. It requires a strong executive to adjust 
the two branches. 

One sales manager seriously suggested that in every organiza- 
tion the man responsible for selling the goods be given a voice 
in factory control. It is all very well, he said, that the selling 
department make out a detailed report to the chief of the 
concern, to match another coming from the factory superin- 

*Pnntcrs Ink, December 22, 1910, p. 59. 



MANUFACTURERS' PROBLEMS 259 

tendent. He said that it was a defect common to most business 
organizations, that orders cannot be filled promptly. He 
called this defect maladjustment, as avoidable as it is regret- 
table. He said that, often, certain advertising campaigns 
and certain mediums of advertising find themselves in bad 
odor in a president's office, when the trouble lies with the 
president himself, who had not perfected his machine. 

The manner in which the N. K. Fairbank Company has 

solved the question is complicated, yet it is said to be a 

rpi real solution. This is merely the ordinary system 

Method of of estimates of future making and selling carried 

the N. K. out to the very farthest degree. Just how the 

Fairbank sales department secures the data is made clear in 

* a letter which J. D. Lewis, general sales manager, 

sent early in the year to his sales staff. It follows : 

To Our Sales Staff: 

We have four months more of this fiscal year — 1909-1910 — in which 
to reach the shipping estimates (there will be less than four months when you 
read this). We must reach these shipping estimates for the reason that our 
advertising and sales expenditures of this fiscal year are based upon the pledges 
for this year's shipments that you and I have made. 

As the result of the definite promise by the Sales Department that our 
shipments during this fiscal year would reach certain figures, certain appro- 
priations were made for saleswork (including the salaries and sabs expenses 
of our selling staff), and for advertising, sampling, house-to-house work, and 
various other mediums of publicity. These appropriations were much larger 
than any made previously in the history of our business, owing to the greater 
amount of business that the Sales Department felt satisfied could be secured. 

These expenditures were based upon the general or total estimates made 
by myself. My estimates were based upon the estimates of our territorial 
managers; their estimates were based upon those of their general salesmen; 
those of the general salesmen on the shipment of previous years, together 
with the knowledge of our greatly increased advertising of this year and their 
confidence in our being able, with the superiority and high standing of our 
various products, to secure for these a continuous growth. 

You know, or soon will know, the eight months' shipments of your territory. 
Then, you can figure exactly the shipments required for the last four months 
of this fiscal year in order to reach your estimates. Much can be accomplished 
during these last four months. They have invariably proved the most extensive 
of any year since this firm has been in business, and you will agree with me 
that our advertising copy, etc., have been unusually attractive and strong in 
character. We have made them so by a more concentrated sales effort, due 
to our realizing just what must be done in a given time. The time we have is 
four months. Speaking of our business, generally, this time should be suflBcient, 
and it will be, if no part of it is wasted. We have enough time, you and I, 
to plan and conduct a most thorough campaign. We must plan what amount 
still needed to reach your shipping estimates for 1909-1910 must be secured 
during May; what during June, July, and August. 



2G0 ADVERTISING AS A BUSINESS FORCE 

Keep closely posted in reference to your shipments of aU our products. Do 
not slight any. Make every day of May, June, July, and August count in gradually 
reducing the amount that it is now necessary to secure in order for you to 
reach our estimates for the year. Last year was the biggest year in the history 
of our business. There is every reason why 1909-10 should be much larger, 
and you have predicted that it will be, and we are relying upon you to do 
your share in making it a "banner" year for every product. The company 
has fulfilled its part of the contract — it is "up to you" to make good your 

P^^^^^^- J. W. Le^is, 

General Sales Manager. 

. . . . The Sherwin-Williams Company has worked out 
a system, adaptable to the paint business, which the general 
manager of the company describes as follows in a statement: 

In a general way I will say that our sales campaigns are, of course, 

largely affected by the producing capacity of our factories but during the past 

rp, few years our sales organization has kept ahead of the factory 

„, '^. output all the time. In other words, we have been crowding 

Vir ... • " our factories to the limit in order to take care of orders from 

IViUmms j.jjg gg^jgg department. 

We have a factory output report which comes to my desk each 
week, and which gives me exact information as to what we are doing at our various 
factories. In addition to this we have a general stock-keeper, whose duty 
it is to keep me informed of the exact status of our stock or raw materials as 
well as our stock of manufactured goods, not only in our factories, but also 
in all of our branch houses. The general stock-keeper receives from every 
warehouse and every factory each month what is known as an overstock 
report, and on this report is listed all stocks of goods that are over and above 
our regular stock limits and which are, therefore, evidently slow sellers. These 
reports are consolidated and passed through to my office, and our sales and 
advertising committee immediately takes action on this overstock report by 
inaugiu-ating a campaign to make the slow sellers quick sellers. 

We have a system of daily and weekly sales reports from all of our various 
branch offices and these reports are consohdated at headquarters, and are 
used as a basis for increasing or diminishing factory output. For instance, 
if these sales reports indicate a very rapidly increasing volume of business 
as compared with the same period last year, we immediately notify the factory, 
and they make provision for the unusual demand that is sure to be made 
upon them. 

We have, of course, our weekly and monthly sales acciu-ately charted for 
several years, and when this present year's line is drawn on the chart its fluctua- 
tions are closely watched, and the necessary information passed along to the 
factory, so that there can be the closest kind of co-operation. 

As Mr. Greene recently explained in an article written for Printers^ Ink, 
the advertising department has representatives upon our sales committee, 
and they are in close touch with all of our efforts to increase our volume of 
business and secure the requisite turnover. 

Adrian D. Joyce, 

General Manager. 



MANUFACTURERS' PROBLEMS 261 

Not only does the manufacturing policy and the selling plan 
influence the advertising campaign and its place in the policy 

The At- ^^ ^^^ concern but there are many parts of the 

mosphere production processes which can be made directly 

^ an"^ useful in creating personal atmosphere for the goods. 

Advertising in connection with the appeal to the consumer. This 

feature atmosphere, or air of individuality, may in some 
cases be pushed so far as to become a definite part of the whole 
policy of the company. The following cases of this are thus 
described by A. Rowden King: 

*The advertising manager who in these days reckons without 
his factory is handicapped. Not only is the factory capable 
of suggesting advertising copy with a broad appeal, but a close 
interrelationship between advertising heads and factory heads 
is quite as necessary as between advertising heads and sales 
heads, if the highest possible efficiency is to be had. 

If it is a chief aim of good advertising to impress the public 
with an idea of stability, it can be done in no better way 
than by publishing pictures or descriptions of the manufac- 
turer's factory equipment. There the factory stands, a most 
tangible and conclusive proof of the advertiser's ability to cope 
with demand. Reams of words would fail to carry so well an 
understanding of the manufacturer's earnestness to build 
trade and to keep it. Every reader of normal psychology 
must feel that here is a concern anchored to one spot by the 
weight of capital invested in national equipment. Suspicions 
of irresponsibility, of "fly-by-night" policies, are allayed 
before they are born. A reader feels by instinct that a com- 
pany thus committed to keeping a plant operating has a 
product which it honestly believes will continue to be purchased 
on its merits for a long period to come. Thus an advertiser 
wins respect and establishes character — a long step toward 
selling success. 

The J. B. Williams Soap Company, South Glastonbury, 
Conn., claims the individual distinction of being the only 
firm to make a permanent advertising talking-point out of the 
fact that its factory is situated in the country, the inference 

*Pnnters' Ink, September 15, 1910, p. 30. 



ADVERTISING AS A BUSINESS FORCE 

being that in the country the air is purer and conditions are 
better generally for the workers and for the products in the 
making. Whether these facts are necessarily so or not, they 
are doubtless full of human interest and have had their appeal. 

The same general argument of factory cleanliness has been 
made a foundation of the advertising of a number of food 
products companies. The Franco-American Food Company, 
Jersey City, offers an excellent example of this. The H. J. 
Heinz Company, Pittsburgh, has used it to a considerable 
extent. The Shredded Wheat Company, Niagara Falls, has 
trained its advertising searchlight upon its "factory with a 
thousand windows." The Postum Company, Battle Creek, 
Mich., has been second to none, perhaps, in the emphasis 
put upon the factory and the urgency with which it has invited 
the public to "reason." . 

The Anlieuser-Busch Company, St. Louis, is another example. 
It built up its reputation by leaps and bounds at the time of the 
St. Louis Exposition by its hospitality at the factory backed 
up with appropriate advertising. 

The immensity of factories and factory outputs is always a 
matter of human interest. The Gillette Safety Razor Company 
recently ran a whole advertising campaign emphasizing the 
fact that six big factories are required to turn out output 
enough to supply the demand. The Hamilton, Brown Shoe 
Company, St. Louis, is now advertising the fact that, if its 
factories and warehouses were placed side by side, they would 
extend a half mile along a street. The Weston Electric Com- 
pany, Newark, has persisted in emphasizing the immensity of 
its factories, depicting them, among other things, in silhouette, 
against the skyline. Other instances of the same thing will be 
recalled to mind with little trouble. 

Certainly the factory is the only part of the internal organi- 
zation in which the public can be expected to have any vital 
interest. Certainly a description of the bookkeeping or other 
similar departments, no matter how well written, could not be 
expected to arouse a spark of enthusiasm. The public has a 
natural curiosity to look behind the scenes at the factories 
where the products it uses are made, especially if that "look" 
does not require much time and inconvenience and means no 
soiling of clothes. Machines become almost human when their 
quantitative capacities and qualitative intricacies are described 
by experts. 



MANUFACTURERS' PROBLEMS 263 

It is a thing too often overlooked but nevertheless true that 
it can be made a matter of great mutual advantage for adver- 
tising and factory heads to get together and talk 
The Need over the past and the future. A growing number 

of ton- ^£ ^j^g y^'ise advertising managers are making a prac- 
tice of having stated hours of conference with their 
factory heads, at which particular attention is given to the 
advertising plans of the immediate future. 

Advertising managers sometimes get in the habit of looking 
upon themselves as superior to any suggestions from their 
confreres in the manufacturing line of their business. But 
factory heads are clear-headed men, as a rule, and not infre- 
quently they are able to make advertising suggestions of great 
practical value. Or, if not, it is of the utmost importance 
that these factory heads should be acquainted in detail with 
the consumer demand which is likely to develop within the 
succeeding few months, due to advertising. This may all 
seem self-evident and yet it is a truth which is by no means 
universally recognized. 

Particularly in the case of specialty businesses, periodical 
trips of inspection through the factories, under the guidance 
of the superintendents, may often prove of the highest sug- 
gestive value to the advertising manager. 

The advertising manager of such a specialty firm tells a 
story which involves a valuable instance of this sort of thing. 
One day, on his trip through the factory with the manager, he 
came to a machine which was turning out strips of gummed 
paper a hundred feet long. These strips were rolled up into 
compact space like bandages. The factory manager called the 
advertising man's attention to them and said "he'd bet he 
couldn't guess what the strips were used for." It was mysti- 
fying. It was then explained that school authorities in a great 
Middle West city had found these strips of gummed paper 
of great value when it became necessary to seal up rooms 
for fumigation purposes. 

But there lay a fine opportunity for good copy, with keen 
human interest behind it, an opportunity, which was timely 
in view of the fact that new talking points had been particularly 
scarce and that the fear of being compelled to make colorless 
repetitions to rehash former copy, had seized the ad man. 
The gummed paper made the basis of a fine new ad brimming 
over with vitality which pulled. 



264 ADVERTISING AS A BUSINESS FORCE 

An excellent example of factory advertising has been 

furnished within a fortnight by the L. E. Waterman Company, 

„, New York, which opened a new factory September 

Waterman 10th. There can be little question but that much 

Factory advertising value was got out of the new factory. 

and Its The advertising has been well rounded and thorough. 
"^^'lif"^ The foundation of all this Waterman factory ad- 
vertising was a full-page "reader" ad which ap- 
peared on the page preceding editorial matter in the September 
11th issue of The Monthly Magazine Section, a component part 
of the Sunday issues of six big newspapers in as many cities. 
This "reader" was brimful of human interest. It was headed: 
"A Million a Year — The record of one factory in one of the 
largest industries in America." 

"To hook up" with this advertising, the Waterman dealers 
in the six big cities referred to were supplied with window cards 
advising the public to read the story "A Million a Year" in 
the next Sunday's issue of the local paper. The same advice 
was contained in smaller ads placed in these same six newspapers 
some days in advance of the "reader." Reference to the 
same article was also incorporated in a quarter-page ad run 
last week in the Saturday Evening Post. A double centre 
spread was run in Leslie's Weeeldy. 

But the fun didn't end here. F. P. Seymour, the Waterman 
advertising manager, further rounded out his factory advertising 
campaign with a page ad in colors in the September 11th issue 
of the Associated Sunday Magazines, and the Illustrated Sunday 
Magazine, in which particular emphasis was put upon the 
opening of the factory, the immensity of the Waterman business, 
and the number and intricacy of the operations required to 
turn out each pen. 

Furthermore, local advertising was done in practically all 
the New York papers contemporaneously with the opening 
of the new factory, far more display advertising being indulged 
in, as a matter of fact, than in connection with the opening 
of the colossal Pennsylvania Railroad's new terminal in New 
York the same week. Special advertising of this sort was also 
done in Baltimore newspapers, they being notably untouched 
by the Sunday magazine lists. 

To cap the climax and link up the whole, the Waterman 
Company invited some 2,000 guests, including many agents 
and dealers, to attend the formal opening on the tenth, when 



MANUFACTURERS' PROBLEMS 265 

a luncheon was served and a careful inspection of the big 
building was in order. 

Mr. Seymour is an enthusiastic believer in the advertising 
possibilities of close contact with the factory. He makes a 
practice of having periodical talks with W. I. Ferris, the 
Waterman factory head. He informs the latter exactly what 
he is planning in the matter of immediate advertising, and Mr. 
Ferris, on his part, being so close in touch with the output 
conditions and thus with the consumer demand is frequently 
able to make suggestions of the greatest value. . . . 

USING THE SALES OFFICE BRAINS IN COPY WRITING 

The National Cash Register Company, of Dayton, Ohio, 

is one of the most advanced companies in the United States 

in the matter of adjusting its advertising appeals 

National to the various factors of production and distribution. 

Cash ^ very interesting series of articles on the advertising 

Company policy of the company appeared in Printers^ Ink 

rr ^^'f''^ , during September, 1911, written by Mr. E. D. Gibbs, 

Two-hundred- , t , . . ,. 

and- fifty- who was lor over ten years advertismg director and 

word Adver- trainer of salesmen for the National Cash Register 

tZSCTTlCtlt 

Company. These articles make the interrelation 
between departments admirably clear, but they are too long to 
reproduce in full. In the course of one of these articles Mr. 
Gibbs relates one incident which throws an interesting light 
on the methods of the company in using the best brains of 
its production and selling forces in the solution of its advertis- 
ing problems: 

*Some six months or so ago a piece of printed matter was 
prepared to go out to nearly a million prospective purchasers. 
In size it was about 8 by 12 inches. It was in colors and the 
space left for type admitted of the use of about two hundred 
and fifty words if set up in fairly good sized type. 

When the proofs of the illustrations were ready Mr. Patter- 
son had them sent to him in New York, where he was studying 
some sales problems in connection with Mr. Deeds, the vice- 

*Pnnters' Ink, September 14, 1911, p. 3. 



266 ADVERTISING AS A BUSINESS FORCE 

president of the company, and Mr. Watson, the sales manager. 
The present advertising manager, Mr. Olwell, was not then 
with the company, otherwise he would have been present. 
Mr. Patterson called an advertising meeting of the officers, 
and as I was in New York at the time he invited me to be 
present. What happened will seem strange to some readers 
of these articles. We devoted two days to loriting tliose two 
hundred and fifty ivords. 

How does that seem to you men who dash things off in a 
hurry.'' What would an agency say to a copy- writer who took 
two days to write a two-hundred-and-fifty-word advertisement.^ 
Yet that is what we did. And the reason can best be given in Mr. 
Patterson's own words. Said he: "We are going to talk to 
nearly one million prospective purchasers in thi^ one small piece 
of printed matter. Whatever we say must be right to the 
point, understandable, and as convincing as it is in our power 
to make it. There is nothing more important confronting 
us at this moment than the writing of this advertLsement. 
It is costing us many thousands of dollars to print and mail. 
It must tell our story so that the merchant will be impressed 
and encouraged to write in to us. It is because of the impor- 
tance of this matter that I have called this meeting of the heads 
of our company to prepare the reading matter." 

I looked around at the men in the room and tried to figure 
in my own mind what their time was worth per day. I don't 
know what salary the president pays himself, but I have a 
very good idea of what the others receive, knowing, as I do, 
how important is their work, and I arrived at a figure which, 
to say the least, was rather startling. 

"Clearly," thought I, "this is the most expensive staflf of 
copy-writers ever assembled in one place, and all to write a 
two-hundred-and-fifty-word advertisement. Talk about thou- 
sand-doUar-a-week writers, they were not in it!" 

"Now, then," continued Mr. Patterson, "let us take a 
blackboard and write down the object of this advertising, 
what we expect to accomplish, what message we wish to con- 
vey, the class of people we are trying to reach, and the character 
of the advertisement itself." This he proceeded to do. 

"First," said he, "the message must be a short one. It 
must be telegraphic. Our prospective customers are busy 
people. They have an almost endless amount of detail to 
attend to. We must send them a telegram." 



MANUFACTURERS' PROBLEMS 267 

In the meantime he put down on the blackboard the various 
thoughts as they occurred to him. . . . 

Then he called for suggestions, and each man in the room, 
including myself, gave an idea of what to say. 

It is not worth while going into an explanation of this 
particular advertisement, nor of what the final choice of 
two hundred and fifty words consisted. The point I wish to 
dwell upon is that the president, the vice-president, and sales 
manager of a $10,000,000 company gave up two days to the 
writing of one circular. 

There you have a reason for the success of the N. C. R.- 
thoroughness. As they say, "Trifles make perfection and 
perfection is no trifle." 

Important as is the lesson conveyed by the above explanation, 
the results secured by that one piece of printed matter are 
worth studying. The question is: Was it all worth while.'* 
Did the advertising make good.f* It did. The company never 
had better returns from any printed matter sent out. So 
you see it paid. 

Mr. Patterson has often made this statement: "There are 
two things to which I must devote the greater part of my time — 
the first is advertising, the second selling. If we advertise 
properly we pave the way for our agents. If we have a thor- 
oughly trained selling force — the men can sell our goods in 
good times or bad. The important things to do, therefore, 
are to improve our advertising and improve our sales force. 
If we get the orders we can easily manufacture the product 
and make the proper records, but first we must get the orders." 

MARKET PROBLEMS — STARTING A NEW PRODUCT 

The advertising problems involved in launching a new 
product are extremely difiicult. They involve first establishing 
the success of the new product, and then protecting it from 
the sharp competition which is one of the inevitable results of 
this success. 

, . , . A manufacturer of a new product, therefore, is 

Introducing . ... 

a New obliged to choose his selling plan, develop a corre- 

Product spending selling staff, create his demand, and prepare 

for competition, all at the same time. Each of these obviously 



268 ADVERTISING AS A BUSINESS FORCE 

has its bearing on the ardoption and development of the manu- 
facturer's policy in all his various lines of activity. An 
interesting ease of new product problems is to be found in 
connection with the development of market for vacuum clean- 
ers as described by Roy B. Simpson, who is now advertising 
manager of the Roberts, Johnson & Rand Shoe Company, of 
St. Louis, and who formerly was interested in exploiting vacuum 
cleaners: 

*[Editorial Note: — Any business man who is willing to 
take the time to think and analyze can get a valuable lesson out of 
the vicissitudes which have beset the vacuum cleaner industry. 
To establish on a sound financial basis a class of goods for ivhich 
no previous demand has existed requires the most delicate manipu- 
lation, an extra-conservative merchandising policy, and a very 
liberal margin of profit. The typewriter, the piano-player, the 
talking machine all had hard sledding at the start. Why ? Be- 
cause out of every dollar spent in promotion ninety cents must 
go toward creating a demand for that general type of article 
and only twenty cents are left to bring the demand home to your 
particular factory. If you start as a manufacturer of clothing 
or canned goods, your problem is simply that of capturing a part 
of the floating demand. You do not have to argue that it is a 
good thing to be clothed or to eat food. People are bound to buy 
hosiery and crackers — it is simply a question of which brand 
they ivill buy. 

But let a new idea like a vacuum cleaner be launched, a7id 
a lot of Tnen dash into it as they would, into a bonanza gold field. 
Instead of nuggets lying around on the surface, killing icork is 
necessary to unearth them. In their efl'orts to try to make the 
thing go the difi'erent manufacturers vie with each other in cutting 
prices, not even knoiving that they are getting far beyond the 
danger line. Advertising is resorted to as though it ivere a 
miracle-worker. It is asked to accomplish the impossible and 
blamed when it fails to overcome unsound merchandising policies. 
If the article itself possesses sufficient merit ayid vitality, the 
industry will eventually right itself when the rainbow-chasers 
have been eliminated. 

Mr. Simpson was advertising manager of a concern making 

*Pnnters' Ink, July 18, 1912, p. 34. 



MANUFACTURERS' PROBLEMS 269 

a vacuum cleaner during the "boom" days. He gives an inside 
view of what may be expected when men rush into a brand new 
industry without having counted the cost and then try to save 
themselves by doing business on an impossible price basis coupled 
with extravagant claims. For obvious reasons, the names given 
in the following article are fictitious but only the names.] 

Three years ago the portable vacuum cleaner business looked 
so promising that it bid fair to eclipse all other specialties used 
in home and office. Any mechanical device bearing the name 
vacuum cleaner was easy to sell. A joint of stove-pipe, with 
a cleaning nozzle on one end and a plunger handle in the other 
end, brought ten dollars. It was a cinch to finance any vacuum 
cleaner scheme, but there have been so many lamentable 
failures that the investor now takes an extra grip on his pocket- 
book when vacuum cleaners are mentioned. 

That this business ha^ had a fearful set-back no well-informed 
man will deny. This condition is due to patent litigation, 
misrepresentation, and unfair competition. Several large and 
highly prosperous concerns have passed through a period 
of storm and only time and careful management can repair 
the damage. 

The portable vacuum cleaner is here to stay — there is no 
doubt about that. It is a necessity, it makes the home sweeter 
and cleaner. It eliminates disease dangers and helps people 
to live longer. Nothing can kill it, but why is it that you do 
not see the vacuum cleaner advertised to the same extent 
as three years ago? 

Let's see how this industry was created and what made it 
sick. 

About five years ago there arose a need for a small portable 
machine at a reasonable price. The intelligent housewife 
had had a taste of vacuum cleaning by the large wagon ma- 
chines, but, because of the excessive cost of the service, only 
the rich could enjoy it. 

The Peerless was the first portable machine in the field. It 
was a large, cumbersome affair, operated by a fan. The 
price of this device ranged from $265 upward. The advertising 
was strong and the sales plan fundamentally sound. This 
machine was offered as a labor-saving device. It was sold 
chiefly to people of wealth. 

A year later the Nonpareil was developed and placed on the 



270 ADVERTISING AS A BUSINESS FORCE 

market at a price of $20 for the hand-operated machine and 
$60 for electrical equipment. Within a year agents had been 
appointed in nearly a thousand towns and cities. 

The third portable machine of note was the Hygienic. 
This machine sold for $125, with a complete equip- 

When_ ment of tools. It is of the highest efficiency pos- 
Uon^rew ^^^^^ ^^ ^ portable cleaner and is sold under an 

Sharp unlimited guaranty. 

Shortly after the appearance of the Hygienic ap- 
peared the Little Wonder, almost the exact duplicate of the 
Hygienic. The Little Wonder is made in several sizes, at $65 
to $135. 

The fifth notable success was the Home Helper Suction 
Sweeper. This is a small machine, weighing about ten pounds 
and employing a rapidly revolving fan as its cleaning agent. 

There were numerous other devices at prices ranging from 
$5 upward, but all of them, save one, were short-lived. The 
one exception, the Domestic, was sold at $8.50. 

Here we have five concerns, which in a short time obtained 
a tremendous distribution. Their profits were large and during 
1910 it is estimated that they spent close to $1,000,000 for 
advertising in the popular weekly publications, standard maga- 
zines, and other media, but much of this advertising has 
disappeared. 

As one who is in the thick of the fight, I can frankly discuss 
the reasons why these great advertising propositions were 
killed. I have no hesitation in giving the reasons, believing 
that the several promoters now admit their errors. These were 
errors of judgment in placing too much confidence in the claims 
of over-enthusiastic inventors. As a rule the several concerns 
mentioned are headed by men of high character and integrity. 

The Nonpareil cleaner probably had a larger sale during the 
first three years than any of the five we have named and the 
business would be alive and prosperous to-day but for the 
grevious error in publishing the names and addresses of all of 
its agents in double-page spreads. Within twenty-four hours 
after the appearance of this large advertisement competitors 
were assailing the sales organization with a view to breaking it 
up. They succeeded. Within a few months this concern went 
out of existence. 

The Hygienic is a high-grade machine. Theoretically and 
practically, it meets all requirements of cleaning in the home. 



MANUFACTURERS' PROBLEMS 271 

The Hygienic people fought its competitors fairly and mot the 

fierce patent litigation honorably. The first advertisement 

played up the hygienic idea very strongly. This was 

^ .^^"' a new thought and it met with a response so great 

P(dnt ^^^ it brought a large volume of immediate use 
orders, and guaranteed contracts aggregating over a 
half million dollars. 

Competitors who had been featuring the vacuum cleaner 
as a labor-saving device immediately recognized the value 
of the sanitary argument. They endeavored to beat the 
Hygienic advertising by making claims just a little bit stronger, 
but this did not increase sales to any great extent, although 
it diverted the attention from the Hygienic campaign. 

The Home Helper Suction Sweeper, which serves its purpose 
admirably as an electric carpet sweeper, was advertised to be 
lighter than an ordinary carpet sweeper, but, as a matter of 
fact, it was several pounds heavier than the Bissell carpet 
sweeper. The Home Helper was also advertised "to do all 
that any vacuum cleaner would do, and more." This overrated 
the efficiency of the machine, as was proved by practical 
comparative tests. Many of the prominent magazines carried 
the Home Helper copy. Other advertisers protested against 
the unfair claims in the copy, but the publishers refused to 
eliminate them. 

Very often a single issue of the popular publications carried 
the copy of six to ten cleaners, ranging in price from $6 to 
$125. All of them are represented to be the " best in the world " 
and some claimed to be "better than the best." The Hygi- 
enic and the Little Wonder, both of which are vacuum 
cleaners of high efficiency, were in competition with suction 
sweeper and the toy hand-power machines. 

The vacuum cleaner and the suction sweeper are two different 
propositions. The former is for thorough cleaning and the 
latter is for surface sweeping. But the public had not learned 
to discriminate between the two and any mechanical cleaning 
device was accepted as a "vacuum cleaner." The business suf- 
fered because of the comparative statements in the advertising. 

The prospective buyer was not interested in a Hygienic at 
$125, after reading the Home Helper oflfer — to put a better 
machine in their homes for $1 down and $3 per month, until 
the full instalment price of $73 had been paid. To the general 
public this proposition seemed reasonable. Why pay $125 



272 ADVERTISING AS A BUSINESS FORCE 

for a cleaner when you can get one for $65 cash or $73 on 
instalments, that "weighs less than a carpet sweeper and 
will do all and more than any other vacuum cleaner can do?" 

A vast number of people who bought the Home Helper 
and cheaper machines were not satisfied. They based their 
opinion of the whole vacuum cleaner subject on the results 
obtained with electric sweepers and cheap hand-pow er machines. 

The Home Helper suffered in turn by the advertising of the 
Domestic vacuum cleaner, at $8.50, and others in the same 
class. The Domestic machine was a hand-power apparatus 
of little or no real cleaning efficiency. Tens of thousands of 
them were sold and they would still be on the market but for 
the fact that Uncle Sam decided it was wrong to use the mails 
to sell a "vacuum cleaner without a vacuum." Its promoters 
were convicted for using the mails to defraud. 

Another factor in retarding the progress of this great industry 
was the strenuous efforts of the Little Wonder and Home 
Helper people to beat each other on the instalment proposition. 
The Little Wonder concern was struck with the attractiveness 
of the Home Helper offer, and to divert the attention of the 
people away from the Home Helper, the public was urged 
to buy a Little Wonder machine for a small cash payment and 
let the rentals of it pay the balance. 

A large instalment business was the natural result and there 
was nothing to prevent any purchaser from renting his machine 
every day. An initial payment of $3 secured a cleaner. The 
purchaser would rent it to his friends and relatives for $2 or 
more per day. Thus, in a month, the machine would probably 
be used 260 hours, while in the average family, where the 
machine was owned outright, it would be used about two 
hours a week. Therefore, a cleaner bought on the instalment 
plan would get 130 weeks' family use during the first month. 

Suppose the purchaser defaulted his first payment and allowed 
the machine to go back. Many, no doubt, were unscrupulous 
enough to do this, after having rented it twenty-six days at 
$2 per day. This plan of selling put a crimp in the Home 

P „■ Helper sales plan and it soon became known that 

the Sales anybody could get a vacuum cleaner for a whole 

Methods month for $1 for the Home Helper and $3 for the 
071 a NeiD Little Wonder. Under such conditions who but the 
^"''^ real honorable folks would pay %Q5, $75 or $115 spot 
cash for a vacuum cleaner.'* 



MANUFACTURERS' PROBLEMS 273 

During the first year or so there was a hirge sale of vacuum 
cleaners direct to the user by mail. The general ])ublic had 
confidence in the advertising. But, after the circus performance 
through which the business passed, vacuum cleaner advertising 
was looked upon with suspicion. The publishers are as much 
to blame as the manufacturers, because nearly all the publishers 
refused to make a comparative test of the various cleaning 
devices advertised in their columns. Had they done so, as 
they were urged to do, business honesty would have compelled 
them to eliminate all copy containing comparative statements 
of whatsoever nature. 

No doubt there are as many vacuum cleaners sold to-day 
as there were a few years ago, but the volume of business 
should be much larger. After a while little the general public 
will forget its experience in buying on advertised claims and 
the vacuum cleaner will again be a splendid advertising propo- 
sition, but for the present vacuum cleaners must be sold on their 
merits — for what they are. Machines of the Home Helper 
type should be sold as electric carpet sweepers and not as 
vacuum cleaners, and all machines must be sold on demonstra- 
tion in the home. 

The vacuum cleaner is here to stay. It is now a necessity in 
every well-ordered home, and if promoted in a businesslike 
manner it will ultimately become greater than sewing machines, 
cash registers and typewriters combined, because every owner 
of those devices is a possible purchaser of a vacuum cleaner. 



MARKET PROBLEMS — PROTECTING THE GOODS 

An advertiser of branded goods is not merely selling goods, 
he is planning for future sales. His interest in the goods, 
then, covers not only their intrinsic value; it involves also 
the attitude of the market toward the goods. His interest 
in his product does not end with its sale, it embraces everything 
which may help or mar its reputation. He is obliged to 
protect his own reputation by protecting the reputation of the 
goods on the market. Roy W. Johnson gives a number of 
instances of this feature of the manufacturers' advertising 
activity from which we draw the following: 



274 ADVERTISING AS A BUSINESS FORCE 

*It is becoming more clearly recognized every day that 

the manufacturer of branded goods — whether they be food 

Protecting products, or jewelry, or packing for steam engines — 

the Goods does not part with his interest in or responsibility 

on the for them the moment the goods themselves leave 

Market jjjg hands. It is getting to be understood that 
the goods are entitled to protection while they are in the 
hands of distributors, and that upon the effectiveness and the 
scope of such protection much of the value of the trade-mark 
depends. The value of the trade-mark as a guarantee of quality 
can be very quickly impaired if it is possible for a jobber to 
sell goods which have grown stale or which have become defec- 
tive through careless handling. 

It is incumbent upon the manufacturer to watch all the 
factors of distribution very closely. Some manufacturers have 
the ultimate consumer in mind as the most important factor, 
and overlook tlie jobber and dealer almost entirely. Still 
others take the attitude that "we sell only to jobbers," and 
what becomes of the goods after that is a matter of little 
consequence. Either extreme is dangerous. The process of 
selling is of equal importance with the process of manufacturing, 
and the goods are entitled to as much protection in the various 
stages of the selling process as they receive in their progress 
through the factory. Much of the effectiveness of the manu- 
facturer's chain-store system of distribution is undoubtedly 
due to the fact that the goods are protected, in price, quality, 
and everything else, until they are placed in the hands of 
the actual consumer. 

Of course, in the end, it comes down to the ultimate con- 
sumer as judge and jury. He it is who determines the reputa- 
tion of the brand, and upon the reputation of the brand the 
business rises or falls. 

The average manufacturer comes in contact with the ulti- 
mate consumer in two ways, through his advertising and 
through the price of his goods, and it is just about as necessary 
to protect the price as it is to keep the advertising within the 
bounds of truth. But in the matter of price protection a 
good many factors enter in which do not appear on the surface. 

A couple of wholesale grocers in Philadelphia who do business 
by the catalogue route, employing no salesmen and securing 



*Printers Ink, June 13, 1912, p. 20. 



MANUFACTURERS' PROBLEMS 275 

cash in advance, recently sent out to the retail trade a long 
list of cut prices on different brands of standard, advertised 
goods. The cut prices were justified on the ground that, 
since they had no salesmen to hire and no credits to carry, 
they could do business cheaper than their competitors. 

The ire of the Tri-State Wholesale Grocers' Association 
which includes most of the credit jobbers in Philadelphia 
territory was roused, and resulted in a crop of letters to the 
manufacturers of the goods which had been cut, demanding 
either a reduction in the manufacturers' prices sufficient to 
enable the members of the Association to meet the cut, or 
the compulsion of the cash jobbers to restore the regular price. 

Here was a case where, apparently, the ultimate consumer 
was not involved at all. There was no certainty that the 
retail grocers who benefited by the cut prices would hand the 
margin on down to their customers. It was a dispute between 
jobbers exclusively, and both sides seemed to have considerable 
justification for their contentions. The attitude of the modern 
merchandiser is indicated in the action of the Cudahy Packing 
Company which promptly "cut off" the cash jobbers from the 
supply of Old Dutch Cleanser, preferring to lose a couple of 
good customers to running the risk of disorganizing the whole 
territory. Moreover it is significant that the Cudahy Packing 
Company was not one of the manufacturers written to by 
the Association. Their action was not taken because of a 
veiled threat on the part of the other jobbers, but because it 
was good business. 

Sometimes price cutting results in a trial of strength 

between the manufacturer and the cutter. The Johnson 

Chemical Company some time ago inaugurated a 

Upholdmg campaign of dealer promotion and newspaper adver- 

Policy tising for Johnson's Foot Soap. The plan consisted 

of a trial order to the dealer which would enable 

him to make a display of the soap, with the understanding 

that the company would take it off his hands if the advertising 

failed to move it. 

In Hartford the newspaper advertising was the signal for a 
cut-price campaign by a local department store. The soap 
was sold at the rate of 17 cents per cake, though the wholesale 
price was 16f cents, and the regular price to the consumer 
25 cents. The trial orders to dealers had been supplied through 
the jobber, and the jobber had been stocked in excess of the 



276 ADVERTISING AS A BUSINESS FORCE 

trial order requirements in anticipation of a demand. As a 
consequence the department store had a substantial source of 
supply which was augmented from time to time by the small 
dealer's stocks which were thrown back upon the jobber 
because there was no sale for the soap at the 25-cent rate. 

The manufacturer naturally cut off the jobber from further 
supplies from headquarters, and stopped all newspaper adver- 
tising in Hartford. The department store maintained the cut 
price for several months — as long as the soap could be had 
from the jobber — but was finally forced to restore the price 
to normal. Of course the cut price on the soap was used merely 
as a "bait" to get people into the store and sell them other 
things at a profit, and as it had got to be an old story the 
cut was not repeated. 

Then the manufacturer reaped his profit from the people 
who had been educated to the soap by the department store's 
advertising, and were now obliged to pay the full price for it. 

A good many manufacturers of branded goods refuse to 

sell department stores at all, for the large department stores 

demand jobbers' discounts, purchasing direct from 

Selling to ^.j^^ manufacturer. They claim that they are entitled 

^Stores"^ ^^ this discount since they buy in large quantities, 
but the large margin — approximately 60 per cent, 
is demanded by most of the largest stores — gives a splen- 
did opportunity for cutting prices. Of course the manu- 
facturer of patented goods has some legal recourse when the 
price is cut (though how long he will have it is a matter of 
some uncertainty) and he can afford to allow the jobbers' 
discount for large purchases; but the man whose goods are 
unpatented frequently cuts the department store out entirely. 
That simply means, of course, that the store must get the 
goods from a regular jobber at somewhere near the retailer's 
price, if it handles them at all, and the danger of cut prices 
is somewhat minimized. Such a condition, of course, breeds 
competition in department stores' private brands, but that 
is much better than a cut price which is bound to depreciate 
the value of the standard trade-mark in the eyes of consumers. 

Indeed this matter of price infringement is getting to be 
more seriously regarded every day, as it becomes more clearly 
realized that the price stands for something to the consumer, 
just as the trade-mark stands for something. A price, in the 
consumer's view, is either fair or unfair, and a cut price indicates 



MANUFACTURERS' PROBLEMS 277 

pretty strongly that the regular price is too high. The average 
consumer does not stop to figure out the policy of selling 
one thing at a loss for tlie purpose of selling two other 
things at a high profit. He does not understand the system, 
practised by some stores, of under-pricing a small lot of standard 
goods so that private-brand goods can be unloaded upon those 
who come after the supply of the standard goods is exhausted: 
such as, for example, advertising "Big Ben clocks for $1.79" 
when there are only a couple of dozen in the store, and when 
those are gone selling unpedigreed cheap clocks for the same 
money. Instead of blaming the cut-price store for putting 
up a job on him, the consumer blames the manufacturer for 
trying to make an exorbitant profit. 

In consequence of which there is a marked tendency toward 

abolishing quantity discounts, and giving every dealer and 

y/jg every jobber an equal chance for a profit, whether 

Quantity he be small or large. A sort of by-product of the 

Price quantity discount is the free-deal, and that is growing 
Problem unpopular also. It is coming to be recognized that 
the quantity discount is a hardship on the small buyer, not 
only because he makes a smaller margin of profit, but also 
because it gives the big fellow an opportunity to cut the price 
and injure the small man's market. 

Instances of this trend are not far to seek. The Ingersoll 
Dollar Watch has been on the market some twenty years, 
beginning its career when the quantity discounts system was 
the only plan of doing business. Consequently it is sold on 
a sliding scale of prices to the retailer, ranging from 75 cents to 
Q5 cents according to the quantity purchased at one time. But 
on the later products of the Ingersoll factory the sliding scale 
has been abandoned, and the $25 watch is sold to the trade at 
a uniform rate of $16.67, regardless of whether the retailer 
buys two watches or a thousand. 

It is quite true that the Ingersoll watch is a patented article 
upon which the resale price can be legally maintained, thus 
relieving the dealer from cut-price competition. For that 
reason it may be easier to uphold a flat-rate price to the dealer 
than would be the case with an unpatented article. But as a 
matter of fact the flat rate can be maintained on articles which 
are not covered by any patent. . . 

Kellogg's Toasted Corn Flakes are sold at an absolutely 
flat rate to the retailer of $2.80 per case of thirty-six packages. 



278 ADVERTISING AS A BUSINESS FORCE 

The rate is not cut by free deals, rebates or any other subterra- 
nean methods. And there is plenty of competition in the corn- 
flake business ; free-deal competition, private-brand competition, 
and bag-package competition. Not long ago one of the big mail- 
order houses advertised Kellogg's in its catalogue at a price which 
represented an absolute loss. The Kellogg Company, through 
its house-organ for dealers, absolutely repudiated the sale to 
the mail-order house, and spent considerable time and money 
to find out what jobber had sold the goods in question. A threat 
to cut him off — which he knew would be carried out to the 
letter — was sufficient to deter him from any future experi- 
ments in that direction, and the publicity given to the affair in 
the house-organ had a salutary effect all along the line. . . . 
The dealers' house-organ, indeed, can be made a very effec- 
tive means of protecting the goods on the market, not only 
as a means of educating dealers in the house policy. 
Educating ]^^^ ^^ ^ weapon in dealing with specific cases like 
Dealers ^^ above. Small dealers, particularly in the coun- 
try towns, are quick to become disgruntled at the 
advent of the price-cutter, whether it is a mail-order house 
or a big store in the neighboring county-seat. The house- 
organ gets to them all at once and quickly, and can explain a 
situation at greater length and in terms which would be impos- 
sible in any other way. 

Some houses, like Colgate for example, place so much 
importance upon the necessity of protecting the goods that 
they maintain a more or less elaborate system of 
Proiechon "watchers," who look out for all sorts of conditions 
qfWatch'ers which might injure the goods in the eyes of con- 
sumers. In addition to this there is a system of rebates 
or bonuses, whereby the retailer earns a sort of retroactive dis- 
count if he does not cut the price, maintains his stock at a 
suitable standard, etc. This system obviates one of the objec- 
tions to the free deal, inasmuch as the discount applies on the 
retailer's next order, and there is no temptation for him to 
overstock — which often means stale goods — to get the 
discount. Moreover, the rebate applies to all purchases, 
of whatever size, and is a reward for living up to a certain 
standard of merchandising, rather than an inducement to 
purchase goods. Hence the small dealer profits at the same 
rate as the large dealer, and a good deal of possible ill-feeling is 
eliminated. 



MANUFACTURERS' PROBLEMS 279 

On some lines of goods which are seasonable — like wearing 
apparel, for instance — it is necessary to cut the price at 
certain times to protect the dealer from the necessity of carrying 
the goods over to the next season, at which time they may not be 
salable. Some manufacturers protect the reputation of the 
goods at such times by supervising the cut sales themselves, 
inserting newspaper advertisements in the names of the 
dealers, offering the goods at certain uniform reductions. 
Thus, all dealers cut at the same time, and to the same degree. 
Moreover, the manufacturer is enabled to explain to the con- 
sumer the reasons for the reductions. Frequently imperfect 
goods or "seconds" are sold at reduced prices, but are not 
allowed to get into dealers' hands indiscriminately. . . . 

Manufacturers in some lines, like Dunlap hats, Manhattan 

Protection shirts, etc., protect the goods by appointing exclusive 

by dealers in towns or certain sections of cities. It is 

Exclusive a simple matter to take the line elsewhere if the 

Ageiicies (jg^ler cuts the price, or does not maintain a suitable 

assortment in stock, or does not keep his stock in proper 

order, etc. 

But suppose a dealer has been unintentionally overstocked, 
or cannot sell the goods in his town, or goes out of business. 
Suppose he goes into bankruptcy, and a receiver's sale follows. 
A cut price on the goods is the result, frequently accompanied 
by the practice of passing off damaged goods as perfect. The 
Gillette Razor Company and the Columbia Graphophone Com- 
pany, among others, meet this condition by taking back all 
goods, which are not salable at the regular price, at the full 
price paid by the dealer for them. The goods are either taken 
back through the jobber, or some other dealer is found in the 
vicinity who will stock the line. In any case the full value is 
allowed, which means every cent the first dealer paid for the 
goods. 

Damaged or shopworn goods, or goods which have become 
unpopular, in some cases are sold at a reduced price, but there 
is a growing tendency to exchange them for perfect goods 
rather than allow them to injure the reputation of the line 
either for price or quality. Sometimes the dealer is permitted 
to make an even exchange — one damaged article for one good 
one — and sometimes he is required to buy new goods to a 
certain proportion of his exchanges. The talking machine 
companies every year issue lists of "cut-out" records; that 



280 ADVERTISING AS A BUSINESS FORCE 

is, records of songs of the day and the like which have lost 
popularity. These records are made the basis of an exchange 
proposition, one popular record of the dealer's own selection 
being given for one record from the cut-out list. Usually 
there is a provision that dealers purchase at least one record 
for every exchange made. That is partly for the purpose of 
making more sales, and partly to minimize transactions at 
the factory by inducing dealers to make their purchases at 
the same time with the exchanges. 

Protecting the goods on the market costs money, and some- 
times it loohs as though it meant the loss of some immediate 
sales. But it pays dividends in the form of increased loyalty 
of the dealers and in preventing depreciation of the name 
value of the product. Twenty years ago it would have been 
difficult to find half a dozen concerns who really tried to do it. 
To-day there are scores who not only try, but in the great 
majority of cases succeed in keeping the reputation of their 
goods free from the blemishes which attack them while they 
are on the road from manufacturer to consumer. 

Another case of the protection of the goods on the market 

brings out the similarity between some phases of this problem 

Gu diro ^^^ ^^^^ phases of the substitution problem which 

Against we have already discussed in various other places. 

Imitators rpj^j^ j^ ^ ^^^^ ^^jj ^^ ^ ^y q^^^^ ^^^ ^^Ij^ ^^^ 

story of a drug specialty which has been extensively advertised 
during the past three years: 

*It fell to the lot of "Tiz," the foot remedy, to be imitated 
the moment it became exploited as a great selling success. 
Imitators came forward by the half-dozen, fondly hoping to 
jump into the market so carefully, and even painfully, made 
ready by the "Tiz" advertising. The necessity of maintaining 
sales against the late comers explains why "Tiz" is now 
appearing in painted display bulletins. Until this problem 
arose "Tiz" had never been "outdoors." 

Competition has frequently stopped at nothing. It has 
boldly followed the type and style of the newspaper "Tiz" 
ads; it has even in some cases laid the name of "Tiz" under 

*Printers Ink, May 23, 1912, p. 80. 



MANUFACTURERS' PROBLEMS 281 

tribute by advertising such raw near-copies as "Biz" or "Ziz." 
Any advertiser who has learned how easily the consumer is 
confused can appreciate that Walter Luther Dodge, the owner 
of "Tiz," began to study with much concern how he could 
insure the permanency of his business and protect purchasers 
from substitution. 

Some years of hard labor and over a million dollars was spent 
to build up "Tiz." All this was done in a way that created 
absolutely new business for the druggists. After several 
years' constant use of the newspaper space, there came a time 
when the columns of some newspapers carried ads of from three 
to five direct competitors following "Tiz" in style of copy 
and everything else. Most of these imitators have seen the 
futility of their effort and dropped by the wayside. But they 
made it advisable for "Tiz" to find a new medium that would 
not only increase the business but insure its permanency 
and stability, and do this at a reasonable cost. 

It was reasoned that prospects could be influenced at oppor- 
tune times by a number of well-located bulletins. For example, 
clerks, solicitors, workmen, motormen and the like, on their 
feet most of the time, are forcibly reminded by their own phys- 
ical annoyance that relief is very much to be desired. As 
they walk from their place of business to the cars and from the 
cars to their home, and all along the route of travel, they are 
told by these bulletins the big vital fact that "*Tiz' Cures 
Sore Feet." Right in the prospect's own neighborhood, 
close to the very stores he is accustomed to patronize, he is 
again reminded by one of these bulletins or walls what "Tiz" 
will do for him. 

The forcibleness and simplicity of the copy is designed to 
send him into the store not merely for a foot remedy, but 
with the definite idea of securing "Tiz." 

A great many of the people, it was thought, read newspapers 
hurriedly. It was thought bulletins would reiterate and em- 
phasize "Tiz" to all the newspaper readers. 

After Mr. Dodge devised the remedy he searched for a 
name. He first thought of using the first two letters of his 
name, but that was unsatisfactory. He asked himself what 
it was for and wrote down the answer. "'Tis for tender feet." 
By changing it to "Tiz" he coined a word that is short, dis- 
tinctive, can be registered, and when coupled with the words 
" for tender feet " practically tells the whole stor3^ So "Tiz" it is. 



282 ADVERTISING AS A BUSINESS FORCE 

The try-out ad occupied less than an inch of space in one of 
the mail-order publications. Several years and considerable 
money were spent in trying to work up a mail-order business. 
This proved the value of the name "Tiz"; the merit of the 
product and its selling possibilities. The percentage of repeat 
orders from the mail-order customers was unusually steady 
and large. This gradually brought in small voluntary orders 
from wholesalers for shipments direct to druggists. One sale 
usually resulted in subsequent orders, demonstrating positively 
that Mr. Dodge was justified in planning to market "Tiz" 
nationally through the regular channels of trade. 

Indianapolis was selected as the test city for a series of 
ads in the newspapers. Results were even greater than antici- 
pated. A month later Columbus, Ohio, was added, then 
followed Cincinnati and Pittsburgh. History repeated itself 
in each city. 

Before that summer was over Mr. Dodge laid his plans for 
advertising nationally. Something of the task involved can 
be realized when one knows that he had no drug-store dis- 
tribution, no established relationship with the wholesalers, 
no sales force, yet he was contemplating advertising in every 
leading newspaper in the United States. That meant work 
and investment of a great many thousands of dollars. 

In less than a year from the time the business was started in 
IndianapoHs, "Tiz" was being advertised in nearly every 
good daily and weekly newspaper in the United States. Dis- 
tribution was established everywhere. Another year of con- 
tinued advertising saw "Tiz" placed upon a permanent and 
profitable basis and the hundreds of thousands of dollars in- 
vested began to show returns. Newspaper advertising was 
maintained steadily. 

Then the imitators sprang up. It looked so easy, so simple; 
but they forgot the vast amount of preparatory work and the 
heavy investment which came before "Tiz" was made one of 
the national advertising successes. 

These imitators have never made enough headway to be a 
serious menace to " Tiz " or the public. But with scores of them 
disturbing the business protection became advisable. Tests 
seemed to demonstrate painted bulletins and walls to be the 
logical medium for increasing the business and preventing 
encroachments of imitators. 

The bulletin copy — five designs are now used — is made 



MANUFACTURERS' PROBLEMS 283 

up of the headings and illustrations run most extensively in the 
newspapers. This emphasizes and enlarges all the advertising 
and connects it up in an emphatic way. It strengthens the 
bond with the trade and the public and makes the asset of 
good-will very much more valuable. 

And this combination of publicity medium has, as evidence 
shows, done much to keep "Tiz" established in the trade. 

MARKET PROBLEMS — FASHION AND ADVERTISING 

One of the manufacturers' problems not covered in the 
previous parts of this discussion is the question of fashion as 
Ad ert' ' ^^ bears on almost all types of product for human 
Influence on wear. For many years manufacturers on this side 
Fashions ^^ ^j^^ Atlantic have felt that they were more or less 
helpless in the matter of control over fashions, but a num- 
ber of experiences of manufacturers in recent years have 
Jed to a distinct feeling of confidence that the appeal to the 
consumer may be used with good effect to materially modify 
the dictates of fashion authorities of Europe, provided there 
is an adequate basis for the American appeal in the intrinsic 
merits of the goods. A number of cases of this kind are thus 
described by Frank H. Holman: 

*A great many manufacturers are called upon to face the 
prospect of losing sales through unpopularity of the goods, based 
in many cases upon mere public whim or caprice, but none 
the less real on that account. Many an automobile sale has 
been lost or won because of a prejudice in favor of a driver's 
seat on the left-hand side or a pair of head-lamps built flush 
with the dash. 

In the textile field and among the manufacturers of dress 
specialties, public taste — which we call by the general name 
of fashion — has an immense influence upon the sale of par- 
ticular goods; probably a greater influence than is the case in 
any other line. For example, is the making of dress specialties 
— ranging all the way from opera cloaks to silk fringe and 
milliner's accessories — a gamble dependent upon the whims 

^Printers' Ink, June 20, 1912, p. 3. 



284 ADVERTISING AS A BUSINESS FORCE 

of some designer in far-off Paris, or will the market respond 
to good merchandising methods in spite of a "tendency" 
against the goods? If it is possible to win out with an article of 
dress against the strong tide of a "style tendency," it should 
be comparatively easy to overcome temporary unpopularity 
with other lines of goods. 

A concrete problem is right now facing the knitting mills 
which have built up a substantial trade in knitted scarfs for 
men's wear. Will they be obliged to turn their machinery 
back to hosiery making when the style changes, or can they, 
by consumer advertising and dealer promotion, keep the 
goods on the market and insure stability for the style.'* 

The editor of a string of fashion publications was interviewed 
on the subject. His papers do not go to the consumer who 
is to wear the garments, but to the garment manufacturer, 
who looks to them to tell him what to make; hence these 
publications must be pretty accurate on the subject of styles. 

"It's all a gamble," he said, "as much a gamble as a horse- 
race. American buyers go over to Paris at certain seasons of 
the year and inspect the various garments which are on display 
for the purpose. Each buyer purchases samples which he 
thinks will have the strongest appeal. The majority naturally 
purchase garments which follow certain 'tendencies' in the 
matter of design, trimming, etc. That tendency represents 
the 'style' and the fellow who doesn't follow the majority and 
buys garments which depart from the tendency is likely to 
get left." 

The editor pointed to an opera cloak which hung near his 
desk. It was made of heavy velvet, but was lined with cambric 
of a bizarre Oriental design. "There's one," he said, "which 
didn't survive. If that could have been pushed into style it 
would have created a splendid market for that particular kind 
of cambric. But it didn't 'take.' 

"The manufacturer of that particular piece of goods," he 
went on, "probably made up from a dozen to twenty different 
novelties in fabrics, and tried them out in the same way. 
If two or three of the lot met with popular favor he was per- 
fectly satisfied to devote his energies to the manufacture of 
those and to forget the rest. The Parisian designers will 
make up maybe a hundred different garments, and are satisfied 
if a fifth of them get across. Of course it's wasteful, but there's 
no help for it." 



MANUFACTURERS' PROBLEMS 285 

Further investigation among manufacturers and jobbers 
of dress specialties disclosed several instances where manu- 
facturers, by shrewd judgment and work along the general 
line of the style tendency, had practically created a market 
for certain fabrics, besides one instance in which advertising 
had sold a novelty directly in opposition to the style tendency. 

It goes without saying, of course, that the manufacturer 

who is ready when a style comes in reaps the harvest. For 

rpj^^ instance, when feathers come back into favor as 

Advantage adornments for women's hats — they have been 

of the consigned to limbo for some time, it is said — that 

Longest feather manufacturer who can sense the change 
ision fartliest in advance will enjoy a considerable advan- 
tage over his competitors. But it isn't always necessary to 
wait until the style is clear in; a little judicious pushing will 
sometimes help it get in. 

A manufacturer of Turkish toweling — a prosaic enough fabric 
— noticed several hats in a Fifth Avenue window one day 
in the trimming of which toweling had been used. That was 
enough to set him wondering whether it would not be possible 
to extend the use of the material still further. So he instructed 
a friendly buyer, then starting on his annual trip to Paris, to 
cable him instantly if there was the least sign which might 
be constructed as a tendency toward the use of toweling. 
The buyer found a few garments in which toweling was used 
sparingly as a lapel facing. He cabled the manufacturer to 
that effect, and received an order to buy every garment he 
could lay his hands on in which the material was used. 

Meanwhile the manufacturer started to make toweling far 
in excess of any orders he had on hand, and started his salesmen 
to talking up the new styles among the trade. He had a 
handsome stock of the fabric laid away in his warehouse by the 
time his competitors got wind of what was happening. The 
model garments which had been bought to his order in Paris 
were displayed to the ready-made garment manufacturers in 
New York, and were featured in the publications for the 
cutting-up trade. The demand for toweling ran so far ahead 
of the supply that the price rose from around 50 cents to a 
$1.25 a yard. 

The vogue for polo cloth last winter tied several bowknots 
in the producing end of the business, and at one time during 
the season it was almost impossible to obtain polo cloth from 



286 ADVERTISING AS A BUSINESS FORCE 

the mills. Just at that time a garment manufacturer went 
to his cloth manufacturer and begged for enough of the cloth 
to make up orders then on hand. The mill couldn't supply 
it, but they had in a warehouse a lot of chinchilla — a fabric 
with a rough texture something like polo cloth, only more so — 
which they hadn't been able to sell because it wasn't in style. 
They offered the manufacturer this cloth at a low figure, and 
he took it. He had nerve enough to make up a sample line of 
smart chinchilla coats, fashioned on the well-known polo 
model. It is stated that six calls upon retailers were enough 
to start the new garment going, and that particular manu- 
facturer is said to have cleaned up $40,000 on the one line. 

What the textile mill cleaned up because of its ability to 
sense the possible demand for coats of a still rougher material 
than polo cloth isn't stated, but it was considerable. There 
hadn't been any demand for chinchilla in a long time; wasn't 
any prospect of one in the making, and competitors had nat- 
urally dropped the fabric. For one hold-over stock of chin- 
chilla represented the entire supply. 

Those two instances show what can be done by following 
the general tendency of fashion, and accentuating certain 
aspects of it. But it is quite possible to create a demand for 
an article of dress which is not in line with the general style 
tendency at all. 

A jobber with headquarters in Lyons, France, and an active 

branch organization in New York had built up a substantial 

trade for Dynamo Maline, a thin silk fabric much 

Creating ^gg^^ f^j. trimming. That is to say it was much 
for MaUne ^^^^ ""^^^ about a year ago, when the bottom fell 
out of the maline market. It simply w^asn't in 
style, that was all. The feminine passion for straight lines, 
or the hobble skirt, or something else — it doesn't matter 
what — had put maline beyond the pale, and the dealers 
simply wouldn't touch it. 

The proprietors of the brand, however, were not satisfied 
to let maline wait for the style to come back. The New York 
branch of the concern thought that it would be better to spend 
a little money in the endeavor to create a demand for the 
fabric than to face the prospect of securing distribution all 
over again at some future date as yet unknown. The feminine 
appeal, of course, was essential, and the concern very wisely 
chose a woman to tell them what it was. 



MANUFACTURERS' PROBLEMS 287 

This lady — who, by the way, is connected with a New York 
advertising agency — made a prehminary survey of the field 
by "shopping 'round" among the stores, asking for maline 
and making inquiries as to why it was not forthcoming. The 
concern was quite right; the demand wasn't there. 

The means adopted for creating a demand was a modified 
sampling offer direct to the consumer, using large space in a 
list of women's publications. Essentially it was not maline 
which was being advertised, but a certain article of adornment 
— a butterfly bow — which could best be made from the 
goods. An attractive photograph of a girl with the bow in 
her hair was run, and the ad offered to send enough material 
for the bow, together with directions for making it, for twelve 
cents and a dealer's name. It is stated that more than ten 
thousand samples were sent out, mostly, of course, to young 
women and girls. 

The samples of maline were wrapped around a cardboard 
reel on which were printed directions for making the bow. 
Moreover, alongside the directions, the card bore the adver- 
tisement which carried the campaign one step further. A 
neck scarf was illustrated as worn by the same attractive 
young lady, and the recipient was told how a scarf softened 
the lines of the face, brought out the contours, etc. Only five 
yards of maline, the card said, were necessary to make the scarf. 
This demand was directed to the local dealer, with a provision 
that the goods might be purchased direct if not in stock. 

For older women, of more conservative tendencies, the 
sampling offer was repeated with a simple neck-bow, as the 
entry. To prevent duplication as much as possible, this bow 
was offered only in black. 

The millinery trade was reached by a similar plan, illus- 
trating a hat trimmed with a jaunty bow of maline and carrying 
the endorsement of a Fifth Avenue milliner. 

Altogether upward of thirty thousand inquiries were received, 
most of which included a dealer's name. Those names were 
sorted according to jobbing territories outside of New York 
City, and displayed to the jobbers' representatives, on their 
winter trip to the metropolis. This evidence of interest, 
combined with the demand on the dealers occasioned by the 
five-yard scarf offer, resulted in a thorough stocking of the 
line by the jobbing trade, including many jobbers who had 
not hitherto carried the line. 



288 ADVERTISING AS A BUSINESS FORCE 

So, taking it altogether, it does not look as though a manu- 
facturer was utterly helpless in the face of an adverse ruling in 
the style sheets. It takes a lot of courage and some outlay 
of capital to run counter to the fashion, or to anticipate it, 
but that is better than allowing a stock of material to eat its 
head off in the warehouse or discontinuing the line with the 
possibility that some competitor may be forehanded when it 
"comes in" again. Right now the manufacturers of ribbons 
are boosting the demand. The ultimate end in view is said 
to be a vogue of sashes, and it is predicted that it will come 
along in the late summer. Just now, however, the ribbon 
men are beginning at an easy stage, with baby ribbons in 
combination with lace trimming. The wider ribbons will fol- 
low along naturally. 

SELLING POLICY AND ADVERTISING PLANS 

The selling policy of the manufacturer is the problem 

which is most intimately associated with the determination 

of the character of the advertising plans. Whether 

fadurers the manufacturer adopts the "regular," or the "new" 

Selling outlets to the retailer; whether he puts out his goods 
through a selling company, through agencies, through 
his own branch stores, or by mail, the choice, once made, deter- 
mines in a measure, the main features of his advertising plan. 

For instance, in January 1912, it was announced that the 
Rogers Thompson Givernaud Company, of New York, creators 
of Rajah silks and a number of other trade-marked brands, 
had decided to go into a direct selling plan* by which they 
were to establish a retail silk store in New York City. As far 
as their advertising was concerned this put them on an entirely 
new basis from that which they had formerly occupied as 
distributors through the jobbing trade. When in the summer 
of 1912f they announced that they had decided to go back 
to distribution via the jobbing trade, it is perfectly clear that 
once more the advertising policy was changed, and that after 

*Printers' Ink, February 1, 1912, p. 60. 
'\Printers Ink, August 22, 1912, p. 46. 



MANUFACTURERS' PROBLEMS 289 

the two changes the company was no longer in the same position 
as an advertiser which it occupied originally. They must now 
win back the support of the jobbing trade. 

Another illustration of the same disturbance of the relations 
between the advertising and the manufacturing plans is found 
in the case of the Kentucky Wagon Company which, in January 
1911, announced* that it was going to abandon the regular 
dealer system of distribution of its products and was going 
to sell its wagons to the farmers directly on a mail-order basis. 
In April of the same year the company announcedf that it 
was going back to the dealers, and again it was clear that 
the two changes in selling plan involved two changes in the 
advertising policy of the company to correspond with the 
methods of doing business. This problem of adjusting adver- 
tising plans to methods of distribution is an immense one and 
will repay careful study. (See also Chapters I and X.) 

REVIEW QUESTIONS — CHAPTER IX 

1. What is the purpose of the Fairbank letter to its sales 
staff.? 

2. How does the Sherwin-Williams Company keep the factory 
output in touch with the sales conditions.'* 

3. What are some of the advertising uses of information 
about the factory.'' 

4. What are the main points in the development of vacuum 
cleaner advertising.'* 

5. In what ways do advertised goods need protection on the 
market? 

6. How can "fashions" be influenced by advertising? 

PROBLEM QUESTIONS — CHAPTER IX 

1. From the standpoint of the advertising manager would 
you say the problems of vacuum cleaner advertising were 

*Prinfers Ink, February 23, 1911, p. 60. 
^Printers Ink, July 27, 1911, p. 31. 



290 ADVERTISING AS A BUSINESS FORCE 

easier or more difficult than they were five years ago? 
Why? 

2. If you controlled the patents on a new kitchen specialty 
retailing for 25 cents and had $10,000 for a publicity campaign, 
how would you go about getting the article on the market? 

3. An advertising agent has laid before one of the largest 
textile mills in New England a plan for a national advertising 
campaign involving an outlay of $500,000 spread over three 
years. The manufacturer has responded with an appropriation 
of $10,000 for a local trial of the same plan. Discuss the value 
of the results of such a test as a measure of the merits of the 
main plan. 



CHAPTER X 

ADVERTISING AND SELLING CO-ORDINATION 

IN OUR first chapter we made the point that, ordinarily, 
advertising results are expected, sooner or later, to take 
the form of increased profits and that increased profits are 
secured by means of either more, or more profitable, sales. 

In the chapters since the first we have examined some fea- 
tures of the existing mechanism for making sales. 

This distribution system is, at best, only a machine for 
giving effect to a power which works through it. The selling 
of goods is the function for which the whole mechanism exists, 
and so, through all the work of this mechanism, whether whole- 
sale or retail, the force which makes it effective is salesmanship. 
Production by factory methods is mere repetition. No two 
sales are exactly alike. Production methods may be completely 
standardized. Selling methods always must allow for the 
human element. With a manufacturing process once devised, 
if there be a suflBcient supply of capital, raw materials and 
working force, proper machinery and efficient administrative 
methods, there is no reason why production cannot 
7s an be extended almost indefinitely. The making of a 

Individual million articles adds few difficulties not experienced 
Transaction. , . , -r. . n- • • j- 

m the makmg oi a smgle one. Jout selnng is mdi- 

vidual. Each sale finally springs out of the decision of some 

individual will. 

Newspapers may be printed at the rate of 10,000 an hour. 

The production may be kept up indefinitely, but each paper 

sold represents an individual transaction. The customer 

must be in the right mood; he must have the effective desire 

£91 



292 ADVERTISING AS A BUSINESS FORCE 

for even so small a purchase. The merchant, whether he be 
a newsboy or a news-stand operator, must present his goods 
at an opportune time through some effective method of ap- 
proach. 

The problems of salesmanship, while thus strictly individual, 
are by no means incapable of some degree of standardization, 
and a few concerns have begun to appreciate the possibilities 
of betterment in this side of business activity. 

The classic instance of a successful organization of sales 

department combined w^tli standardization of sales methods 

is the National Cash Register Company. 

Organiza- This concern, making a high-priced specialty, is 

tion of the even more dependent upon the efficiency of its sales 

Cash force than are most manufacturers. The goods are 

Register obliged to create their own demand. There are com- 
paratively few, of those to whom they are to make 
their appeal, who can see at a glance the possibilities of the 
machine and the benefits to be derived from its introduction. 

The stimulation of the sales work of this company dates 
back to the World's Fair in Chicago in 1893.* At that time 
the concern made its first important public exhibition of cash 
registers, and it had this exhibition in the hands of demon- 
strators drawn from its sales force. The president of the 
company visited the exhibit and found, upon listening to the 
demonstrations given by its representatives, that there was 
not only a wide divergence in the character of the demonstration 
given, but that the percentage of inefficiency in these demon- 
strations was very large. Many of the salesmen apparently 
failed entirely, or in a very large measure, to grasp the possi- 
bilities of the machine and to bring out its best points. As a 
result, the president took in hand the training of the demon- 
strating force and, in addition to giving them detailed lessons 
as to how to demonstrate, he prepared a pamphlet of standard 



*Printers Inl; June 28, 1911, p. 3; July 6, 1911, p. 3; July 13, 1911, p. 17; 
July 20, 1911, p. 17; July 27, 1911, p. 34; August 24, 1911, p. 9. 



CO-ORDINATION 293 

arguments and descriptions and required those who were 

in charge of the exhibition to memorize this pamphlet and to 

base their demonstrations on the arguments which it contained. 

After the Fair was over, the question arose in the president's 

mind as to whether his sales force was, on the whole, any 

more efficient than he had found the demonstrators 

Selling at the exhibition to be, and it occurred to him that 

Was Sys- ^j^jg jjj^pj, q£ effectiveness might offer a solution for 

lemafizcd , „ ., „ , > i • 

the failure of the company s busmess to expand at 

the rate he had expected. As a result of this question in 
his mind, the president and the head of his sales depart- 
ment undertook a series of tours over the country for the 
purpose of visiting different sales offices. The branches 
were entered by the two representatives of the house, either 
with or without the knowledge of the agent, and an inspection 
was made of the premises, and a careful test was engaged in, 
designed to cover the selling ability of each member of the 
sales force. On some trips an elocutionist was taken along 
for the purpose of criticising the address and the superficial 
sales methods of the salesmen. After these tours had continued 
for some months, the results obtained were tabulated and 
put before the selling force of the company in the form of a 
series of articles and pamphlets written by the head of the 
house. The tangible results of this examination were two: 
first, a partial attempt at standardizing the selling methods 
throughout the company's system of sales branches; and 
second, the publication of an "Argument Primer," which was 
designed to do for the sales force what the previous pamphlet 
had done for the demonstrating force at the Chicago Fair. 
The salesmen at first were asked to use it; but as a result of 
the small number adopting the suggestion, attempts were made 
to persuade them to employ this help in their sales operation. 
This failing in turn, the memorizing of the primer was made 
a condition of continued employment in the company, and it 
was announced that all salesmen who declined to memorize 



294 ADVERTISING AS A BUSINESS FORCE 

the pamphlet, or were unable to do so, were to be eliminated 
from the sales force. 

The training method thus inaugurated has been expanded 
from year to year, until now the sales organization of this 
company is regarded as an example of the most extreme attempt 
to standardize the selling of goods. The company now main- 
tains a regular salesman's school with a full set of courses 
covering such subjects as, the nature and uses of cash registers, 
business systems in use in the different parts of the country, 
interviewing methods, explaining methods, methods of conduct- 
ing an agency, closing arguments, selling points, and a wide 
group of subjects bearing on personal and ethical topics of 
value to a salesman. Training in this school is required of 
all salesmen, and promotions into the selling force, made from 
the ranks of the employees of the company not connected with 
the sales department, are made only after the course has been 
taken. 

A second feature of the present system of training for sales- 
men is the Sales Manual, which is the outgrowth of the 
The Uses Primer which was originally employed. This Man- 
of the Sales \xal has gone through several editions. The Manual 
""" is designed to contain concise instructions to the 
salesmen as to their conduct and methods in almost every 
conceivable circumstance. The salesman is required to know 
the entire book thoroughly. The four main heads, in the 
present form of the Manual, are: (1) Salesmanship; (2) Ap- 
proach; (3) Demonstration; (4) Closing Arguments; and under 
these heads are grouped arguments, objections, and answers 
taken from the experience of the salesmen employed by the 
company. 

A third feature of the company's sales-training equip- 

fj^g ment is what is known as the 100-Point Club, which 
lOO-Point is designed to stimulate an interest in the volume 
of the sales of individual salesmen, thus adding en- 
thusiasm to the other incentives given to increase sales. 



CO-ORDINATION 295 

Any salesman who sells $2,500 worth of cash registers 
each month for twelve months is entitled to membership in 
this club for the year in which his sales are made, and the 
membership in the club is not only very much sought after 
as an honor, but has certain substantial rewards as well. The 
selling system has responded very quickly to this method of 
stimulation. 

Shading away from the highly eflBcient type of sales organiza- 
tion represented by that of the National Cash Register Com- 
pany, there are to be found types representing all degrees of 
intelligence until we finally reach the type of concern which 
depends entirely on a selling force recruited by accident and 
securing business through its "natural born" qualifications. 

The feature of the problem of sales-force organization which 
particularly appeals to us in this discussion is the question: 
How is the sales force, either good or bad, to be co-ordinated 
with the advertising activities? 

Consideration of this question soon shows us that it has two 
distinct parts: (1) How is this co-ordination to be brought 
about in the actual operations of selling and advertising.? 
and (2) How are these two separate departments to be organized 
so as to be administered without conflict.'' One part deals 
with co-ordination "on the road," where the sales are made, 
and the other deals with co-ordination "in the office," where 
the sales are planned. 

CO-ORDINATION " ON THE ROAD " 

Leaving the question of office organization for the moment, 
let us examine one or two cases of co-ordination in actual 
operation. 

We have already seen (page 265) how the National Cash 
Register regards its advertising activities and how frequently 
the heads of the sales force are called into consultation in 
matters of advertising policy. This illustrates one phase of 
the problem. It is typical of this company's methods. 



296 ADVERTISING AS A BUSINESS FORCE 

The American Multigraph Sales Company, makers of the 
" Multigraph" light printing device, has had particular success 
in its efforts to secure co-ordination between the advertising and 
selling departments. Some of the methods employed in this 
work are told in the following terms by Tim Thrift, adver- 
tising manager of the company, in a series of articles copy- 
righted by the Printers' Ink PubHshing Company: 

*A little over two years ago a change was made in the sales 
management of The American Multigraph Sales Company. 
For eighteen months before that time there had been no adver- 
tising manager. The then sales manager and advertising 
manager could not pull in double harness. The advertising 
manager quit. A successor was not appointed during the 
remainder of that sales manager's connection with the company. 

The new sales manager looked at things in a different 

light. He believed that the business required an advertising 

executive as well as a sales executive; that perfect 

Teain team work between the two was essential and pos- 

Advertisin •^^'^^^' ^^^^ ^^^ ssiXes manager should be, in a sense, 

a,j(^ assistant advertising manager and the advertising 

Selling manager assistant sales manager; that with the work 
of each clearly defined there should be no confusion, 
and that with this kind of a working arrangement the busi- 
ness would develop as never before. 

The writer became advertising manager shortly after the 
change in sales managers. His ideas of co-operation between 
the sales and advertising departments coincided with the 
new sales manager's. 

To show the working arrangement between these depart- 
ments of The American Multigraph Sales Company, and how 
much further the advertising department goes in assisting 
the sales department than most advertising departments, is 
the object of this series of articles. 

Let it be understood, however, that while the activities 
of the advertising department as they will be outlined may 
seem to extend more in the sales end than the actual advertising 
end of the work, this is not the case. The advertising manager 
is no less advertising manager • — his services in this respect 

"Printers' Ink, May 30, 1912, p. 3. 



CO-ORDINATION 297 

being similar to those of any advertising executive of a large 
corporation. But the point to be made is the extension of 
his field of activities and his close relationship with the sales 
manager in sales work. 

With the beginning of the new regime a series of sales con- 
tests was started. The origination, as well as the de- 
^ales \q\\^ of carrying out these contests, was left to the 
Begun advertising manager. Each month he submitted his 
suggestions to the sales manager and a conference was 
held on them. 

In order that the advertising manager might be kept fully 
informed on the progress of sales, he was given the same weekly 
sales reports that the general sales manager received, and 
made acquainted with all conditions in the field. It was 
realized at the outset that unless he was fully informed on all 
sales conditions he could not thoroughly analyze them. 

An important help in the contest was a house-organ con- 
ducted in rather an unusual manner. This feature of the work 
will be taken up later. At this time we will concern ourselves 
only with the various contests and how they were carried on 
so as to secure the exceptional results which are secured. 

Before there could be contests, however, it was necessary 

that some basis for figuring individual sales be arrived at. 

This was a problem which presented many perplexities. 

Figuring Yqy instance, the business was not old enough to pre- 

Sales determine the possible business to be expected from a 
given territory, based upon the possible users of the 
products in that territory, either as a unit or by vocations. The 
systems of other concerns in the office appliance field were 
carefully studied along this line, but they oflFered little real 
help. 

Finally it was decided to take the total sales of each man 
for a year back, find the average monthly sales, and then make 
individual quotas, based upon a fair and equitable estimated 
increase; which increase was, in turn, based on a careful investi- 
gation of general business conditions and the volume of busi- 
ness being done in principal commodities in various sections of 
the country. 

This method was naturally somewhat crude, and it was 
appreciated that mistakes would show up, but a start had to 
be made somewhere and the plan really worked out very well. 
Later on better statistics were available and the quotas could 



298 ADVERTISING AS A BUSINESS FORCE 

be figured much more accurately, so that to-day there is practi- 
cally no dissatisfaction with the quotas as given out for the 
ensuing year. 

The company has sixty division and branch offices. In the 

matter of quotas, branch office managers were classed the same 

as salesmen. Thus there were two general classes 

The q£ sales quotas — those given division ofiices for 

Sustem total division business, and those given salesmen for 
individual business. The division office quotas were 
arrived at in the same manner as the salesmen's quotas. 

The salesmen were, however, divided again into three general 
classes, according to ability — each representing a fixed amount 
of business per month. The amount for the minimum class, 
for instance, was $1,500 and so on up through the other classes. 

The contests were then based on the per cent, of the quota 
made by each division office or salesman. For example, the 
ofiice making the highest per cent, of its quota for any particular 
month in which a contest was on won the prize then offered, 
the same going to the division manager. The salesman making 
the highest per cent, of his quota received the prize individually. 

During the first year it was discovered that many of the 
divisions and salesmen were running a considerably higher 
per cent, of their quota than was at first thought possible. 
These were therefore marked for a change in their quota at 
the end of the time limit. In only one or two cases was it 
found that the quota was started off too high to give the office 
or salesman a chance at the prizes. 

Only actual business was figured, and the figures were based 
on the orders themselves, except in the case of distant ofiices, 
when a telegraphic report was accepted, to be confirmed later. 
Thus there was little chance for error. 

Reports on the previous week's sales, with the resulting 
standings, were published on the following Friday. At first 
the percentage of the quota made was given for each office 
and salesman, but later this was changed and the position 
alone indicated. Whenever an office or salesman made 100 
per cent, of the quota a star was given, and for each hundred 
added another star given. This made keen rivalry to get 
in the star class as early in the month as possible. 

The first sales contest was for the first six months of 1911. 
This period was divided into two cjuarter periods. The fol- 
lowing prizes were put up: To the division manager making 



CO-ORDINATION 299 

the highest per cent, of his quota for the entire period, $200 
in cash, or a diamond, or set of dining-room furniture of equal 
value; to the salesman making the next highest per cent, a $150 
Howard watch or a silver service of equal value. 

Each manager or salesman making his full quota for the first 
three months received a pair of gold cuff links, and for the second 
three months a watch fob with his initials cut on it. Thus, 
in addition to the big prizes, it was possible to win lesser prizes 
by simply making 100 per cent, or better of the quota for three 
months and six months. 

Beginning with March, slogans were adopted for each month. 

In March the slogan was, "Forward March for Record Busi- 
ness"; in April, "A Record Shower of Business"; in May, 
"Not We May Gain in May, but We Will," and in June, " We 
Must Can May Records." 

Copies of these slogans, for framing, were furnished each 
office every month and these were placed in a conspicuous place 
where they would be seen each day and have a silent influence. 

In April and June special stunts were worked. The first 
one — which was used in April — was a "pledge" plan. The 
pledge is reproduced on this page. 

This pledge was sent out in duplicate. One was signed by 

each manager and salesman and returned to the 

The liome office. The other was retained. As fast as 

Pledge ^^^ signed pledges came in the names were put on the 
"Honor Roll" in the house-organ and a lapel button, 
reading, "I Have Taken the Pledge," sent to each man.* 

This button attracted a great deal of favorable attention. 
It always required some explanation. Prospects, hearing 
of the contest, were drawn into participation in it through 
their inherent love for anything that smacked of a fight. Busi- 
ness came rolling in. The month closed with many quotas 
made and others showing a higher percentage than before. 
In fact, a new record was established for April business, beating 
any previous April by more than 30 per cent. 

Now the psychology of it. A pledge is a sacred thing. 
To take a pledge means assuming a certain moral obligation. 



*The wording of the Quota Pledge was as follows : I do solemnly PLEDGE that 
I will make my Quota, or more, for the month of April, in the Year of Broken 
Records, Nineteen Hundred and Eleven, so help me hard work, enthusiasm, 
co-operation and initiative. It is imderstood that I am not exempted, however, 
from becoming reasonably intoxicated with joy, happiness, or success. 



300 ADVERTISING AS A BUSINESS FORCE 

Few men take any sort of a pledge lightly. While the pledge 
in this instance was semi-humorous, it caught the fancy of 
the men, and they were glad to enter into the spirit of the thing. 

In June the stunt was totally different. The general 

sales manager went on his annual vacation. The day after 

he left the sales reports for the first two weeks of 

"s^dlin^ the month came in to the advertising manager. 

Scker^ They were rather disheartening, for the figures 
showed that the sales, despite the contest, were far 
behind the same month the previous year and the month 
before of that year. Something had to be done. 

A "Surprise Party" was determined upon. That night 
a lettergram went to each division and branch manager, giving 
a brief outline of the idea and offering the suggestion that the 
boys surprise their general sales manager. It warned them to 
be on the lookout for a special issue of the company's house- 
organ which would explain the plan in detail. 

Two days later the special followed. It suggested to the 
men that this was an opportune time to show the general sales 
manager what they thought of him. It contained signed 
articles from both the advertising manager and the assistant 
general sales manager. The following extracts from the 
"Surprise Party Edition" will give some idea of the way the 
support of the men was solicited : 

General Sales Manager Jared is away on his vacation. He won't be back 
until the fifth of July. 

Now, while he's gone, we want to all get together and give him a surprise 
party — put astonishment all over his face. 

A lot of you fellows have been itching to show your appreciation of his 
splendid work in some practical way. And you have demonstrated how you 
felt toward liim by rolling up record business. 

But now is yoiu" best chance to do the big thing. This is your opportunity 
to show him in a way that he will most appreciate that you are right with him 
every minute, and that you have the highest personal regard for him and the 
very able way he has handled the exacting duties of his position. 

There isn't any too much time left, but there's enough. Plug the game as 
you have never plugged it before and let's roll up a bunch of business for June 
that will make him gasp for breath when he gets back to the office. 

You can do it. There's no doubt of your ability to put this stunt across. 
And it will be the biggest thing you've ever done — big for you and big in 
what it will mean to him. 

The latter part of the week another special issue went out. 
In the meantime many of the managers had replied to the 



CO-ORDINATION 301 

lettergram, pledging their support. Their replies were printed 
rerhatim, with appropriate comments. 

The following samples of the replies received will show the 
reception accorded the idea : 

We secured the following orders yesterday as the beginning of our contribu- 
tion to the Surprise Party (orders totaled $1,750). We are confident that 
there is quite a bunch of prospects which the Chicago organization will turn 
into orders for the success of the Party. 

Telegram received. Detroit is with you. Everybody working hard. 

We will certainly do everything we can in Pittsburgh. We have a number of 
good prospects which we expect to close and expect to make oiu* quota or 
better for June. 

The assistant general sales manager was busy at the same 
time with inspiring letters to the men in the field, encouraging 
and enthusing them. The last week of the month two more 
special issues of the house-organ bombarded them, with more 
letters. The month closed in a blaze of glory. What promised 
to be a disastrous period was thus turned into the third largest 
month in the company's history. The general sales manager 
came back to find a surprise awaiting him indeed, and a surprise 
which warmed the cockles of his heart. . . . 

Mr. Thrift in this series* describes a number of other "stunts, " 
each of which is full of suggestions. Each was selected to be 
of timely interest — a baseball contest for summer, a Christmas 
Tree for December, etc. The purpose of the whole series was 
to keep the selling force up to maximum speed by various 
forms of appeal to their real interests. 

These cases of specialty selling methods for disposing of 
expensive machines sold by soliciting salesmen are somewhat 
different from those where the unit of sale is small and where 
a retailer must intervene between the salesman and the con- 
sumer. This introduces a new element requiring co-ordination 
with the advertising operations. 

The National Lead Company, makers of white lead, sell 
to retail dealers through their own salesmen. Their methods 
of getting unity between advertising and selling effort are thus 
described by R. Bigelow Lockwood : 

*Printers Ink, May 30, 1912, p. 3; June 6, 1912, p. 17; June 30, 1912, p. 10; 
June 27, 1912, p. 36. 



302 ADVERTISING AS A BUSINESS FORCE 

. . . . *As the methods of helping painters and dealers 
are much alike we shall treat of them together, but before we 
go into details it is important for us to know something about 
the ways by which these middlemen are reached. We should 
also look into some of the difficulties which have to be met 
and overcome before the dealer becomes converted to "Dutch 
Boy" white lead. 

The National Lead Company employs between 80 and 100 
salesmen who cover the country. These salesmen 

F&rce^ sell to the dealers only. When they come across a 
painter they simply talk to him, educating him to 
the value of using "Dutch Boy" white lead and explaining 
the various ways by which the company will help him to 
increase his local trade and build up a reputation. All calls 
made upon painters are looked upon as "missionary work"; 
part of the plan to create the demand for "Dutch Boy" white 
lead for the ultimate benefit of the dealer, who buys his stock 
in proportion to the rapidity with which he moves it off his 
shelves. 

There is another way by which painters and dealers are 
reached. This is through the medium of a monthly magazine 
devoted to the interests of good painting and called The Dutch 
Boy Painter; it is issued by the advertising department of the 
company. Ninety-five thousand dealers and painters are 
reached by this publication and the mailing list is kept up 
to date. . . . 

In order fully to understand the dealer's position and gain 
a clear idea of what often has to be done toward educating 
him let us create a typical dealer, whom we will call Mr. Blank. 

Mr. Blank does not have to be educated to the necessity 
of carrying white lead in stock. Every paint dealer must carry 
some white lead on his shelves, the same as he carries linseed 
oil and colors. A paint stock without white lead is as incom- 
plete as a grocery store without sugar. Mr. Blank knows 
all this, but perhaps like some of his brethren he looks upon 
white lead as more or less of a necessary evil — a sort of inter- 
loper over which he would prefer not to waste much time. 
This attitude springs from the fact that he has become so infatu- 
ated with the idea of selling specialties at a certain per cent, 
profit that his business instincts are blind to the profits that 



*Adveriinng and Selling, February 1911, p. 66. 



CO-ORDINATION 303 

lie in such an old standby as white lead. He fails to see the 
gold in the ore. 

On the other hand, Mr. Blank may perhaps lean toward 
the other extreme and feature white lead as a "leader," selling 
it at cost or less in order to attract trade to his store in the hope 
that he will be able not only to sell the "leader," but various 
other things upon which he depends for his profit. 

Clearly then, Mr. Blank must be educated to a point 

where he will realize that white lead is too important a 

business builder to be shoved in the background. 

Educating jjg must be made to realize that a staple article such 

Retailer ^^ white lead, the thing which is in reality the very 
backbone of the paint business, should not be allowed 
to shift for itself while his pet specialties are being forced upon 
an indifferent buying public. He must be taught that high 
percentages of profit, if figured on a few sales only, are sub- 
ordinate in importance to a larger sale of staple goods at smaller 
profits. Not that specialties are to be discarded; but only 
that they are relegated to their proper place. 

If Mr. Blank has been using white lead as a "leader" at 
a cut price it becomes necessary to show him how to make 
intelligent use of a "leader" — how to harness it to his business 
and sail with the wind, instead of against it; and the quickest 
way to go about that is to select as a "leader" something that 
people know about and want. Momentum exists just as surely 
in practical merchandising as in practical mechanics, and the 
merchant who fails to avail himself of the selling momentum 
which "Dutch Boy" white lead has gathered through years of 
advertising and use is wasting power. It is said that a ten- 
penny nail will hold the most powerful locomotive ever built, 
provided you lock the wheel of the locomotive with it before 
it gets started; but let the locomotive once get under way and 
it will laugh at a ton of tenpenny nails. "Dutch Boy" white 
lead may be compared to the locomotive coming down a clear 
track at full speed. Such a power doesn't require a cut price 
to make it "go." 

In connection with these general business principles Mr. 
Blank is taught that just because he carries "Dutch Boy" 
white lead he cannot afford to remain inactive himself, waiting 
for business. The trade he sells to may know the merits of 
the product, through the influence of the manufacturer's 
national advertising, but how are they to know that Mr. Blank 



304 ADVERTISING AS A BUSINESS FORCE 

carries "Dutch Boy" white lead unless he brings it out of his 
cellar or back room and puts it in the window with a good-sized 
sign, talks about it and advertises frequently in the local 
newspapers? 

Another difficulty that often stands in the way of winning 
over the dealer lies in the comparative figures which are con- 
stantly being presented to him by "knockers" to prove how 
bad a thing white lead is for his business. Dealers are con- 
tinually being shown sets of figures which appear on the surface 
to prove that either no profit results from the sale of white 
lead, or else that actual money is being lost on each sale. When 
such cases are encountered, it's up to the company to prove 
the fallacies contained in these reports, and the answer is 
generally along the following lines: 

In the case of prepared paint the profits are always figured 
on all the ingredients; the pigment, oil, "turps," colors and the 
drier. This is so because these various ingredients happen 
to come to the dealer made up into paint and are sold by him, 
not separately as pigment, oil, etc., but as paint. 

On the other hand, in the case of made-to-order paint, the 
profits are figured on each ingredient separately, because the 
dealer buys and sells them separately. Thus, when compari- 
sons of profits are presented, the trap into which the dealer 
falls is the comparison of the profit on paint, on the one hand, 
with the profit on only one ingredient of paint (white lead) 
on the other. Thus, in comparing white lead with mixed 
paint, the dealer should always figure on white lead as an 
integral portion of paint, and must also take into consideration 
that since white lead is useless as paint without oils, and various 
other ingredients, every 100 pounds of white lead sold means 
the sale also of a certain quantity of linseed oil, turpentine, 
colors, drier, etc. 

To compare the value of the lead-and-oil business with that 
of the mixed paint business it is only necessary to figure what 
the ingredients of a gallon of white lead paint cost and the 
profits derived from their sale. The result, compared with 
the profits on a gallon of mixed paint, shows whether or not 
it pays to push white lead. 

Figures are prepared on this basis by the advertising depart- 
ment and presented to the dealer, showing that the profit 
to him on the ingredients of lead and oil hand-mixed paint 
is equal to that on ready-prepared paints and often greater. 



CO-ORDINATION 305 

After these, and similar arguments have been used with 
success upon our friend, Mr. Blank, the next step is to help 
him move his stock. 

It would be impossible for a National Lead Company sales- 
man to carry about with him actual duplicate samples of the 
free advertising matter issued by the company for the use 
and convenience of painters and dealers. These include 
posters, signs, hangers, mechanical window displays, 

Helping newspaper advertisements bound together in a 

i/al-e ^ pamphlet, all ready to hand to the printer, electros, 

Sales etc. To carry a "life-size" line would require several 
sample trunks, so a better and perfectly efficient 
method is resorted to. Each salesman has with him a small 
leather-bound loose-leaf book in which are pictured all the 
various classes of advertising matter of which Mr. Blank may 
avail himself. 

Not every piece of free advertising literature is shown in 
this book, however, but at least one good sample of each kind 
is listed. Each page is keyed, and when a salesman sends 
in an order for advertising matter the painter or dealer gets 
all the matter which is included under that particular form. 
Thus, if Mr. Blank is struck with a dealer's newspaper advertise- 
ment in the salesman's sample book he not only receives that 
particular one, but a whole book of ready-made ads as well, 
out of which he tears a page whenever he wants his newspaper 
copy changed. Electros for use in these ads are supplied free, 
and as the back cover of the book is as order blank in post- 
card form, self-addressed to the company, it is very easy for 
Mr. Blank to send for whatever electros he may desire to use. 

This free advertising service is also furnished to painters, 
the copy of course being written along different lines to fit 
the field. 

It sometimes happens that a "Dutch Boy" dealer has a side 
wall on the outside of his store of which he wishes to make 
some practical use. Merely painting his name, together with 
some of his specialties, lacks life and he decides that his wall 
sign should embody some sort of a decoration. Here is where 
the "Dutch Boy Painter" often steps in and supplies the 
missing link. Any dealer can obtain, upon request, a suitable 
and durable "Dutch Boy" poster which will fit very nicely 
in his sign space. The fact that the dealer may have incor- 
porated the "Dutch Boy" in his sign purely for decorative 



306 ADVERTISING AS A BUSINESS FORCE 

reasons does not detract from the advertising value which 
the National Lead Company gets out of the display. . . . 

Some there are who in reading this article may ask, "But 
what about the jobber? How is he reckoned with?" 

The National Lead Company considers the jobber 
Ah ffj ^^ ^^ little importance that no advertising matter 

Jobber f ^^ ever addressed to him as a jobber. He is treated 
exactly the same as a dealer. In the East his influ- 
ence scarcely counts, but in the West he assumes slightly more 
prominence, due to the fact that travel is more expensive in 
western territory. 

The selling force of the National Lead Company is extremely 
effective. Analyze the reason and you will find that there is 
hearty and enthusiastic co-operation between the salesmen 
and the advertising department. 

In many companies co-operation between these two depart- 
ments is a dream which is never fully realized. There is very 
apt to be an earnest endeavor on the part of the advertising 
department to bring this ideal condition about, but generally 
the effort is all one-sided. Salesmen, as a rule, are backward 
about giving credit to the advertising department. They are 
too prone to subordinate this branch of the business, preferring 
to stand, or at least assuming to stand, entirely upon their 
own resources. While such an attitude is not healthy, it pretty 
generally exists; but not in the particular case under present 
discussion. Every salesman in the employ of the National 
Lead Company is made to feel that he is an actual part of the 
advertising department, with a voice in its plans and campaigns. 

This feeling of unity was not created in a day. It took 
time, and the methods which were originally employed to create 
it are never relaxed. The advertising department never ignores 
the salesmen. At the beginning of every campaign the general 
outlines and policies are presented to the sales force, and later 
the actual details as they are worked out are laid before the 
salesmen for their inspection and criticism. 

The preliminary outlining of general policies, at the begin- 
ning of a campaign, is done by the advertising manager of the 
company at branch sales conventions which are held 

„ J. . when necessary in the various sections of the country 

^ Plans represented by the several branches. At these con- 
ventions all the plans of the advertising department 
are presented to the salesmen in conference, and it is shown 



CO-ORDINATION 307 

j.ist where and how the salesman's help is absolutely essential 
in the carrying out of the suggested policies. 

Later presentation of details is made by means of a bulletin, 
prepared in New York and issued conjSdentially to each man. 

By taking the men on the road into the strictest confidence, 
a feeling of loyalty and "oneness" is built up. The really 
ideal condition exists where the men who make up the sales 
force of an organization are as desirous of working with the 
advertising department as the advertising manager is of working 
with them. Secure this state of affairs, even to a moderate 
degree, and the chances are in favor of something doing all 
along the line. 

The H. J. Heinz Company, of Pittsburgh, makers of pickles 
and preserves, sell directly to the retail grocers so that their 
selling problems are not unlike those of the National Lead 
Company. But the differences in the character of the products 
make the use of different methods imperative. Frederick 
W. Nash, who was over seven years in the sales and advertising 
department of this company, gives the following interesting 
description of some of the methods employed in securing the 
proper co-ordination between the concern's sales and adver- 
tising activities. 

*A systematic and thorough course of instruction in the 

art of displaying the 51 varieties in grocery stores is given 

every Heinz salesman by trained demonstrators 

Selling a employed by the company. These instructors work 

Specialty with two or three salesmen at a time, during their 

attendance at local sales conventions, until each 

traveler can build attractive window displays, ingenious counter 

pyramids, and artistic shelf departments of Heinz goods, 

not neglecting such fine points as proper color schemes in 

their assortment. As each line of products is advertised in 

season, he makes that particular variety or group the most 

prominent in his display work in the stores, so that there may 

be no failure to bring these goods to the consumer's attention 

while the periodical advertising is appearing. 

When the company is ready for any special advertising 

*Printers' Ink, November 23, 1911, p. 3. 



308 ADVERTISING AS A BUSINESS FORCE 

campaign — and nearly all of them are "special" — advance 
proofs are mailed to the 500 members of the sales force, usually 
twenty-five or more proofs to each salesman, with instructions 
personally to post up these proofs in the leading stores in 
their territories. This "personally placed" proof advertising 
reaches the merchant and his clerks with all its force and effect, 
whereas comparatively few would read the periodicals in 
which it appears or notice it there. This single sheet "ad," 
pasted on a store window or under the glass of a showcase, 
is also read by thousands of consumers aw'aiting service in the 
stores. It attracts the curious, and many read it when posted 
in this way who would scarcely glance at it in turning the pages 
of their magazines. This extra circulation of from 10,000 
to 15,000 counts when handled in the proper manner. It also 
assists the salesmen in securing adequate distribution on the 
varieties advertised, in advance of the publication, and is a 
special lever to induce prominent displays of the advertised 
goods, in the arrangement of which the salesman puts to good 
use the expert knowledge gained through the instruction above 
described. 

Figuring on an average of about twenty window displays 
and thirty interior showings for each salesman, it will be seen 
that when the Heinz ad on mince meat appears, just before 
Thanksgiving, for instance, there will be prominent presentation 
of the goods by something like 25,000 stores in the United 
States when tha publication reaches the consumer. Adver- 
tising "sharps" can figure out for themselves the dollar value 
of such display in connection with periodical advertising. 

But the Heinz salesman's job of co-operation is by no 

means done when this part of the work is completed. Every 

Saturday, except in midsummer the Heinz represent- 

Salesmen ^tive spends his time in one of his most influential 

Educators stores, and, equipped with fine china and silver, he 

serves in a clean, high-class, appetizing manner, 

attractive samples of "the 57" to callers at the store, at the 

same time explaining about the Heinz Model Clean Kitchens, 

open to visitors all the time; tells about the fine materials used 

in all Heinz goods, and why no preservatives of artificial nature 

are required in the Heinz establishment, etc., etc. 

Consider that at least 350 of these trained salesmen put in 
an average of eight hours each day for about thirty Saturdays 
per annum talking Heinz advertising direct to women most 



CO-ORDINATION 309 

interested — reaching, say, a total of 10,000 homes per annum 
in this personal way, and you can get a pretty fair idea of the 
value of such work, done by men of above average intelligence 
and appearance. Remember, also, that this work is done on 
Saturdays, which are off days for effectively soliciting in the 
city trade, anyway. Not content with reaching only the 
customers who call at the stores, however, a number of attrac- 
tive solicitors' cases furnished by H. J. Heinz Company, each 
containing three or four packages, assorted, of the particular 
goods the grocer or the Heinz Company desires to push, are 
placed in the hands of the grocers' clerks by the Heinz sales- 
man, with instructions how to use them in making the rounds 
of the house for grocery orders. It is a common occurrence 
for a grocer's own solicitor, when coached by the Heinz repre- 
sentative, to sell to homes on the outside more Heinz goods 
and create more new business for "the 57" during a "Saturday 
Demonstration " than is done in the store. This is what Mr. 
Heinz calls "a salesman multiplying himself while he is on the 
job." 

This is one method of co-operating in reaching the con- 
sumer when the merchant is agreeable and carries the goods, 
but if desired or necessary local distribution is not 

Going forthcoming after the salesman has done his best to 
Consumers S^t the goods in by working on the grocer, the up-to- 
date Heinz traveler now goes direct to the consumer 
personally. Perhaps a concrete example will best illustrate 
the method used in this work. 

Out in Wisconsin there was a thriving town of about 10,000, 
where the Heinz representative could get no vinegar customers 
among the grocers. All bought from farmers, from friends, 
or would not pay the higher price for the Heinz product, stating 
that their customers were satisfied with the vinegars sold at 
lower prices and would not pay more. Finding himself appar- 
ently up against a stone wall with the dealers, the salesman 
put in a solid week in this town, visiting the leading homes. 
He obtained names of next-door neighbors from door to door, and 
often made such a good impression as to get cards and letters 
of introduction to tell his story to friends of the ladies interested. 
He took no orders, but introduced himself as a special repre- 
sentative of H. J. Heinz Company, in connection with vinegar, 
and merely wished to explain to the lady of the house some 
things about vinegar which interested most housekeepers. 



310 ADVERTISING AS A BUSINESS FORCE 

He Induced the women to get out samples of the vinegars they 
were using and without "knocking," easily demonstrated great 
superiority for his samples, working in an interesting story 
the vinegar manufacture practised by Heinz as compared with 
the crude and imperfect methods of farmers. When asked 
where Heinz vinegars were for sale in the town, he stated 
that he regretted to advise there was no merchant who carried 
it in stock here, and explained the reason as given him by the 
merchants — that the people would not pay the price necessary 
to ask for really good vinegar; they were satisfied with the 
(poor) quality being furnished them. 

He suggested that if the madam desired her grocer to supply 
her with Heinz vinegars, or felt differently about being satisfied 
with the farmer's vinegar, she should enlighten her grocer on 
the subject. After about fifty of the most influential women 
of the town had held indignant conversations over the telephone 
with their grocers, the distribution proposition on Heinz 
vinegar in that town was materially different. By diplomatic 
handling the salesmen kept from antagonizing the merchants, 
who generally appreciated that the "joke was on them," but 
the chief feature of this experience was the permanent vinegar 
business built up in that town as the result of the work. From 
a condition of no dealer handling it, all soon sold it, and the 
women who heard the "story of the Heinz Vinegar," wanted 
other Heinz varieties, so that general business was helped on 
the line. This particular salesman was working on straight 
commission, and did this work on his own account and time, 
but the results secured made it a profitable week in dollars 
and cents to him and demonstrated to the company the value 
of such special work by salaried men, wherever needed to meet 
special conditions. H. J. Heinz Company does not underrate 
the value of *^ personal advertising''^ by all their employees. 

During the "Benzoate" campaign the matter was carefully 
explained to all connected with the company, with the sug- 
gestion that by refusing to use any food prepared with artificial 
preservatives, the general cause of food purity, and also of 
their own business, would be advanced. There is little doubt 
that the influence of 500 Heinz traveling men in various depart- 
ments of the business was felt by the recalcitrant hotel keepers, 
who still served benzoate ketchup — through numerous "kicks" 
about "doped" food. For a while the whole Heinz sales force 
talked anti "Benzoate" wherever opportunity occurred; they 



CO-ORDINATION 311 

educated their wives and friends to do likewise, and they 
influenced many strangers to join them in the campaign by 
their pubUc talk and acts on the subject. This is what might 
be called "auxiliary advertising" by a sales force, and that 
it was proved very effective in combination with printers' ink 
kind can best be testified to by some of those interested on 
the other side of the benzoate controversy. 

In none of the cases thus far cited does the concern sell 
through the "regular" selling system, including both the 
jobber and retailer. But there are many houses putting out 
their goods through the "regular" system who are giving 
attention to these problems. 

Charles C. Casey takes up in the following discussion some 
of the concrete problems which present themselves to a company 
selling through the regular distribution system in its efforts 
to co-ordinate its selling and advertising activities : 

*Ever hear of an advertising department which was backed 
up in an ideal manner by the balance of the organization? 

Making Some advertising departments are not. One of 

Use of them is located in a New England city — in the 
Consumers general offices of a certain well-known advertiser. 
Inquiries This particular advertising department has the 
nice little task of handling several hundred consumer inquiries 
a month through dealers everywhere. 

Inquiries are obtained on a basis of service to the customer, 
and the advertising department works hard enough in its effort 
to see that the customer gets service, but 

And there's the rub. The advertising department has 
cajoled and threatened, and coaxed and "cussed" (in dignified 
English), but the manager knows that the customer is not 
getting a tenth of the service it is the policy of the house to give. 

The dealers just won't see the inquiries as this manager sees 
them. They won't handle them as they should be handled. 
He can't make them nor persuade them to follow up his inquiries 
— at least not by his methods. 

Another advertising manager (and he isn't the only one) 
has the same diflBculty in getting salesmen to follow up inquiries. 

^Printers" Ink, May 16, 1912, p. 28. 



312 ADVERTISING AS A BUSINESS FORCE 

Several hundred inquiries were sent out by the advertiser 
within a month, practically every one of which looked good 
for a sale. 

But the sales didn't result. The advertising fell flat, so 
far as sales were concerned. 

The advertising manager was not able to understand why. 
He puzzled over it for some time, in the meantime running 
other advertisements and sending out more inquiries. 

Finally he began to trace the inquiries to see what became 
of them after they were sent to the selling force. He soon 
found that the inquiries were being "followed up" by the sales 
force in a half-hearted way. Many of them were thrown away 
without even being followed up. 

Steps were immediately taken to compel the salesmen to 
follow up the inquiries promptly and to try to close up sales. 

The sales manager and the general manager were both 
shocked at the ad man's report and both took up the problem. 
They promptly and authoritatively instructed each individual 
salesman to follow up every inquiry to the last source of infor- 
mation. 

A good many salesmen came back with hot, resentful letters, 
citing instances where inquiries had been worthless, and declar- 
ing they did not care to waste their time with that class of 
inquiries. 

That put the matter on a different basis. The value of the 
inquiries was a hard question to determine — "maybe the ad 
man didn't know." 

Things went on in a bad way for several months. Then, 
there being little actual business resulting from the advertising, 
the appropriation was not renewed and the advertising was 
stopped. . . . 

If the average advertising man could instil into his board 
of directors, into his general manager, into the sales manager, 
and into all of the members of the sales force the same enthusi- 
asm which he has, he could do twice as much productive adver- 
tising with half the appropriation. 

That is putting it strong, but lack of co-operation is one of 
the most serious handicaps which the advertising man has 
to overcome. 

Most advertising managers need an advertising manager; 
somebody to advertise them and the advertising department 
to their own organization. 



CO-ORDINATION 313 

Nearly all advertising men keep so busy trying to sell their 
company's product to consumers that they lose sight of the 
necessity of selling advertising to their own people. 

And then lots of advertising men are pretty busy keeping 
their boards of directors "sold" on advertising and their bosses 
"sold" on themselves as the man to handle the appropriation. 

In some organizations the advertising man is about the only 
one who knows, or cares, anything about the advertising. And, 
if he attempts to keep records to prove the "results," most of 
those on whom he tries to use his figures openly or secretly 
charge unfairness in "estimating" the value of his kind of 
"results." 

If they all knew as much about advertising as the advertising 
man ought to know, there would be no difiiculty in getting 
co-operation. But the average organization is satisfied with 
thinking it knows. 

Everybody in the average organization, from the advertising 
man's own stenographer to the president himself, is likely 
to entertain a secret notion that they could write advertisements 
a little better than most of those printed. 

Even the office boys are likely to entertain each other with 
jokes about the "awful illustrations" used in some of the ads. 

The advertising man who is wise won't miss any opportunity 
to advertise advertising, particularly his kind of advertising, 
to everybody in his own organization. 

He should never let a piece of mail go out of his office 

„„,.. „ for anybody in the organization until it is 

^the^ polished and labeled "18k gold." Every move 

Advertising s\io\x\d be a part of an organized campaign to "sell" 

to the the department and its work, and keep it sold, to 
Sales Force everybody in the organization, from the janitor up. 

The department should never send and inquiry out into the 
field without trying to "sell" it, either as a sales tip or as 
something otherwise valuable, to the man who gets it. 

It costs money to obtain inquiries. The advertiser should 
certainly be willing to spend something to follow them up. 

If you don't think any more of your advertising inquiries 
than to "dump" them into the busy salesman's desk without 
explanations, don't blame him if he dumps them into the 
waste-basket. 

Unless you put a value on your advertising department, 
it will be accepted as valueless. 



314 ADVERTISING AS A BUSINESS FORCE 

The most the organization can be expected to do is to accept 
the department at the value it puts upon itself and upon its 
fruits. 

Not only is the problem of co-ordination between advertising 
and selling a matter of securing the enthusiasm of the organized 
selling force, but it also extends clear down to interesting the 
various factors in the distribution system, even including 
the retailer's clerk. Clayton A. Eddy, advertising manager 
of the Detroit Stove Works, of Detroit, Mich., describes in the 
following terms some of the methods which have been em- 
ployed by various manufacturers in co-ordinating the work 
of their advertising and their distribution system : 

*Too many manufacturers, it seems to me, lack the quality 
of good sportsmanship toward their national advertising, 
whether in the magazine or the newspaper. They do not give 
the supplementary service sufficient force to extend to it the 
actual sales. These are the very people who frequently com- 
plain that "national advertising isn't paying me as it should." 

National advertising is only the first step toward the sale. 
The manufacturer who wants to cash in to the utmost upon 
his campaign must explore the resources of his common sense 
and ingenuity to bring the diffused force of it to bear in those 
places where potential sales are apt to clog. 

A salt manufacturer who had advertised in a national way 
for many years found his advertising was not bringing the 
results it should. His product was sold through the jobber 
to the retailer. After careful investigation among the channels 
of distribution for cause and effect he decided the jobbers' 
salesmen were lukewarm over the proposition. The fact was, 
this manufacturer had taken for granted that the jobbers' 
salesmen knew as much about his proposition as he did himself. 

He did not realize that the special processes employed in 
mining the salt and preparing it for market were so intricate 
that they required much thought in order fully to understand 
them. IJnless the jobbers' salesmen and the retailers did 
understand about the special processes they would not under- 



*Printers' InJc, December 7, 1911, p. 14. 



CO-ORDINATION 315 

stand or be able to explain the reason for the superiority of 
the salt or its higher price. 

After reasoning this out the manufacturer decided a campaign 
of education was needed. He wrote every jobber with whom he 
was doing business and secured the names and addresses of 
every salesman on his force. He then started a direct cam- 
paign to these men, going into details relative to the manufac- 
ture and purifying methods used before the salt was ready 
for marketing and giving reasons which the salesmen could 
explain in talking to customers. 

The first piece on the list was an attractive folder show- 
„ „ , ing views of the plant, the special machinery used 
ManufM- ^"^ ^^^^ preparation of the salt and the advantages 
turer which this manufacturer had over other salt manufac- 
Stirred Up turers. The next folder showed how the salt was 
His Sales j^rought from the wells into special storage tanks, 
how the brine was drawn off to a series of heaters, 
how the impurities were taken out and only the finest digest- 
ible salt remained. 

By a series of these folders he carried the salesmen along 
step by step until at the finish this special brand of salt was 
as well known to them as any line of goods they sold. Further 
to secure their good will and co-operation a series of folders, 
entitled, "Men Who Do Things," was mailed to the list. 
These folders were interesting because they described the lives 
and hobbies of prominent business men, told about them in 
an entertaining way, and the only reference to the manufac- 
turer's proposition was a few lines at the bottom. 

This campaign was so interesting to the salesmen that a 
large number of them carried various pieces on their trips 
and showed them to the merchants they called upon. That 
it was a success was proved when the orders on this special 
brand of salt increased to a great extent the following year, 
and salesmen now consider this salt the best known brand 
of its kind on the market. 

A maker of refrigerators made the most of his advertising 

campaign during the spring months by also using 

TheMetkods space in a high-grade supplement which was in- 

Ref to eluded with the leading newspapers in several large 

Maker cities. This manufacturer arranged for good-sized 

space in this supplement, had newspaper electros 

made of the advertisements, just as they would appear in the 



316 ADVERTISING AS A BUSINESS FORCE 

supplement and then arranged with his salesmen in the cities 
in which the advertisements were to appear to call upon the 
local dealer and secure his co-operation by showing him where 
he could advantageously use space enough in that particular 
edition of the Sunday newspaper to run the ready-made ads. 
He showed dealers where he was advertising direct to the 
people in their communities. Co-operating with the national 
advertising and using space over his own name in the local 
Sunday paper just at the time the manufacturer's advertising 
appeared in the supplement, would give the dealer a certain 
amount of prestige and sales which he could not secure in any 
other manner. A large number of dealers in the various cities 
took advantage of this proposition and increased their sales 
very materially. 

A manufacturer of kitchen cabinets secured the co-operation 
of dealers by suggesting a plan to boom trade during a sup- 
posedly dull season. One dealer only in a city or town 
^j, has the selling agency for this line. These dealers 
/^g^ are for the most part instalment houses selling on time 
payments. The manufacturer suggested to each 
dealer on his books that he form a Kitchen Cabinet Club. The 
plan was to form a club of, say, fifty, giving to each member 
special terms by which they are able to buy a kitchen cabinet 
at an attractive price. One dealer using the plan advertised, 
" By joining the club you have a Blank kitchen cabinet delivered 
to your home at once on payment of only $1 at time of 
joining and $1 each week thereafter for twenty-four weeks." 

The regular price of this kitchen cabinet as fixed by the 
manufacturer is $25 cash or $27.50 on easy payments. The 
cash price is never any less, and it is only through these semi- 
annual club sales that they can be bought for $25 on easy 
payments. In other words, if you join the club you get your 
cabinet at the lowest cash price and pay for it in dues of only 
$1 a week — a clear saving to you of $2.50. The advantage 
of this plan to the dealer is that it does not mean selling it at 
a cut price, but simply offering a special proposition by which 
a certain number of buyers can obtain a cabinet and pay weekly 
on the same terms as ordinarily made to cash purchasers. 
A large number of dealers found this an excellent method of 
booming sales at a season when they would otherwise be very 
slow. 

Many manufacturers find their adveij^ising does uot get the 



CO-ORDINATION 317 

kind of co-operation from their own sales force necessary to 
insure the greatest success. Many salesmen are willing to 
talk about the advertising their firms are doing and use the 
plans to help them sell goods when possible, but they are not 
well enough informed regarding the advertising to use the 
proposition as effectively as it might be used. 

One manufacturer spending a considerable amount in na- 

Askinq tional advertising prepared at frequent intervals 
Questions a list of questions relative to the advertising, and 
About the makes it part of the duty of each salesman to send 
Advertising -^^ written answers to the questions to the adver- 
tising department. Questions such as the following are asked : 

"When is our magazine advertising to appear.?" "How 
many months will it run?" "What are the mediums used.?" 
"What are the advertising helps we furnish the dealer selling 
our line.?" "What can the dealer expect from us in the way 
of co-operation, etc. 

By this method the manufacturer knows absolutely that 
his salesmen are not only fully informed regarding a campaign 
upon which sales depends, but their active interest is at all 
times assured. 

A manufacturer in sending out advertising matter to his 
salesmen found after watching the force closely for a time 
that many of the salesmen were not posted on the advertising. 
He found that while advertising matter was sent to each and 
every salesman, some did not give it the attention it deserved. 
When they came to headquarters they would claim that in 
many instances certain forms of advertising matter had never 
been sent them and therefore they did not know the house was 
furnishing it. To overcome this and to be absolutely sure that 
each salesman received all the advertising matter and samples 
furnished the trade, a return post-card was included with every 
piece of advertising matter sent to the salesmen. They were 
requested to sign this card and return it to the home office. 
By that method a record was kept of shipments to every sales- 
man and their statements of "never received it" are met with 
the card they signed as a receipt. 

One manufacturer realizing the importance of the retailer's 
co-operation sent out a printed form to every dealer on his 
books asking questions pertinent to his line and the needs of 
the dealer. Questions as to whether the dealer received many 
inquiries from a particular advertising campaign; whether sales 



318 ADVERTISING AS A BUSINESS FORCE 

were made easier; whether the dealer could suggest any plan 
which the manufacturer was not then using for increasing 
the selling efficiency were asked. They were also requested 
to send in any special plans or suggestions which it might occur 
to them would be of assistance in pushing the line. This 
manufacturer not only received a large number of these question 
sheets filled out and signed, many of which contained excellent 
suggestions, but the plan also had value in getting the interest 
of dealers and making them feel their suggestions and co-oper- 
ation in the selling of the line were desired. 

In a great many instances house-organs have proved 

The Use most valuable in backing up the national adver- 
oj House- tising campaigns. One manufacturer publishing 

organs a house-organ had on his mailing list over 16,000 
retail merchants. Hardly an issue of the paper went out that 
it did not contain some reference to the advertising campaign. 
This firm did not take for granted that because they were doing 
a considerable amount of advertising all their customers knew 
about it. The house-organ edited along the right lines can be 
made a great ally for the advertising department. It can 
educate retailers to the importance of selling advertised goods 
and show them why it will prove most profitable for them. 
It can offer suggestions for local advertising and above all 
instil enthusiasm for the line and confidence in the manufac- 
turer and the goods he advertises. 

The plan of selecting special weeks and devoting them to 
the exclusive advertising of a certain brand of paints or shoes 
has been successfully worked out by several manufacturers. 
One large paint manufacturer arranged for space in a number 
of prominent magazines during certain weeks in the spring. 
He desired this advertising to do full duty for both the factory 
and the dealers. He realized that concentrated effort on the 
part of both was necessary to secure the greatest value. Every 
dealer selling the line was advised that a certain week, the dates 
of which were given, would be known as "Blank Paint Week." 
During that week their advertising would appear in full force 
in a large list of magazines. Dealers were offered special win- 
dow trims for paint week displays, paint car and window cards, 
special electros for newspaper advertising, etc. This adver- 
tising, used during the entire week. 

The response to this offer was surprising to the manufacturer. 
From all over the country dealers wrote commending the plan 



CO-ORDINATION 319 

and offering to co-operate to make Blank paint week a success. 
The result was that concentrated efforts on the part of dealer 
and manufacturer made this extensive magazine advertising 
the most profitable of any advertising they had ever used. 

A well-known shoe manufacturer used a similar plan with 
excellent results, choosing a week during the fall and reminding 
the dealers for weeks ahead regarding the Blank shoe week. 

CO-ORDINATION IN ADMINISTRATION 

As has been seen from some of the cases cited, the problem 
of properly adjusting the administrative organization of the 
advertising and selling departments is an extremely difficult 
one, but each of these cases shows that it is not at all impossible 
to solve this problem and to make the two supplement each 
other satisfactorily in actual operation. 

F. Manning, the general sales and advertising manager of 
the Grape Products Company, of Northeast, Pa., (makers 
of Walker's Grape Juice) contends that the sales and 
advertising managerships should be one. Mr. Manning backs 
up his contention with the record of his own experience in 
exploiting Walker's Grape Juice, and, as this product is sold 
through the "regular" channels of trade, his case serves to 
illustrate the fact that the principles developed in some of 
the other cases of direct sale may also be applied under indirect 
selling conditions. 

*" Selling" and "Advertising," while seemingly considered 
as two separate branches of business endeavor and expense, 
are, in fact, inseparable units of the same thing, "Salesman- 
ship." 

And while the actual taking of orders may be directed by 
one head, and the advertising of the article covered by these 
orders may be directed by another, to good effect, the fact 
that these two great selling forces, directed at the same objec- 
tive, and being each dependent upon the other, so similar in 
character and results, should certainly indicate consolidated 

*Printers" Ink, September 29, 1910, p. 3. 



320 ADVERTISING AS A BUSINESS FORCE 

management, just as do the various branches of manufacture. 
One rarely encounters a factory in which all the various divi- 
sions of production are not directed by a single head — under 
supervision, perhaps, but with one centre of management and 
responsibility. This being the case in manufacture, why should 
the combined selling effort be handled as two separate branches 
of the business organization? 

Advertising is as dependent upon the selling for results as 
the salesman is dependent upon advertising for consumer 
demand with which to interest the retailer and secure prestige 
with the jobber. No dealer, whether retailer or wholesaler, 
buys an article simply upon its merits — he buys upon sala- 
bility first, price and profit next, and then he may be interested 
in quality. 

But a ready sale, a steady consumer demand, is always the 
first thing he considers in the purchase of goods for sale. 

This premise granted, why should not the same head direct 
both the elements needed to secure signed orders — the ulti- 
mate result? 

In introductory work, as well as in subsequent development 
of a market, it is of vital importance that salability, prompt 
and certain, of the article be impressed upon each member of 
the trade for which the article is intended — that each dealer 
be convinced that the goods will sell — and the best proof of 
this, nowadays, is to show the dealer just what kind of adver- 
tising is to be done, how much, when, and where. 

The dealer should be taken into the salesman's confidence, 
and the plan, with reasons for its employment, explained until 
the buyer is in position to purchase the goods upon his own 
judgment as to the demand to be created by the advertising 
which he has seen, knows, and now understands. 

The average dealer will be found to have a peculiar concep- 
tion of advertising, which, in so far as the trade is concerned, 
has been generalized so much by large advertisers, 
Advertidng g^g ^gjj ^^ ^y g^ many small propositions with "flash" 
Retailer ^ campaigns (designed to shoiv rather than to create 
lasting results), that the average buyer regards a 
new article with a certain conservatism which borders upon 
suspicion. 

He says: "Produce this demand first, and then I will stock 
your line — but in advance, well, never again." Hard experi- 
ence has taught him to ask for demand ^r^^. 



CO-ORDINATION 321 

This attitude hampers distribution, which in turn lessens 
sale results, and of course the advertising ratio of expense is 
increased. 

In order to lessen this conservatism on part of the buyer, 
it is only necessary for him to understand your plan of campaign 
as you do, before he believes in it as you do, and is willing to 
risk his part of the investment in an effort to secure his part 
of the profits accruing from the advertising — just as you do 
in putting it out. 

The "printed word" is all well enough, and serves its purpose 
in placing an advertised product before the trade — but by far 
the most potent possibility in securing trade enthusiasm (next 
to actual demand itself) is the confidence inspired by the sales- 
man himself in his daily contact with the trade. 

Inform your salesman, as you yourself are informed, about 
your plan, its aim, purpose, and raison d'etre — place him in 
position to reason out, for himself and his (your) customer, 
why you are doing this thing or that — and its relation to the 
future sale it is to produce for his customer, the dealer, and his 
own sales record. 

This done, the salesman does not, of necessity, "talk from 
the book" — he thinks and explains, with all the force of his 
own language, thought, and conviction, just what his house 
is doing and why his proposition is a safe one for the buyer. 

For this result to be accomplished to best effect, it must be 
simultaneous with the trade journal campaign with the circular 
work, and, if possible, with the preliminary steps of the campaign 
itself. 

This necessitates a close interlocking of the sales and 
advertising details — calls for team work of a high order 

Closer — ^^^ ^^ success of its execution determines 
Contact in the exact generalship exercised in the carrying out 
Adminis- of the composite "sales" and "advertising" cam- 

tration paign. And generalship means profit, ejfficiency, 
distribution, and lasting results. 

Because of the importance of the trade relation and its peculiar 
significance to the campaign itself, the man to "general" 
this campaign is, logically, the judge of merchandise, the 
seller, the trained commercial advocate — the source of selling 
enthusiasm, the man-who-foots-the-bill of final results — the 
sales manager. 

But simply because this sales manager happens to be a 



322 ADVERTISING AS A BUSINESS FORCE 

successful salesman, or even a successful manager of salesmen, 
does not necessarily entitle him to the position of sales and 
advertising manager in charge of this campaign. 

If he is to direct the advertising he must also be schooled 
in that craft as well; his knowledge of selling, of the trade, 
of competition, of territory, etc., will not necessarily fit him 
for the position of arbiter and director of this most powerful 
factor in modern business — advertising. 

This sales manager must also be an advertising judge, and 
possibly a creator, an accurate theorist, a producer of adver- 
tising through an execution. 

And, on the other hand, merely a capable, forceful, brainy 
advertising man cannot lay claim to preference as sales manager 
in this instance. "Personal appeal," "reason why," "class 
copy," etc., mean but little to the road-worn salesman fresh 
from the firing line of contact with competition and skeptical 
buyers. 

He must have this put to him in the language of his craft, 
that of the seller — the man who has been there. The hardest 
thing to accomplish in the sales manager's work is that of 
convincing the salesmen that the man at the desk really knows 
anything of what they are actually up against in their daily work. 

They feel that it is all well enough to sit in the office and 
tell how it should be done, "but, after all, the boss would talk 
a little differently if he had ever been up against the game 
himself," etc. 

Ninety-nine per cent, of our advertising men have never 

carried a sample case, nor are familiar with the physical, 

rpr practical selling of merchandise. For the most part 

Selling they have gravitated into the business from the 
Knowledge editorial, the newspaper, or magazine field, and en 

a^m'^ route have gathered a lot of splendid thought and 

aft experience, but, as the salesman says, "haven't been 

up against the real cloven-hoofed buyer — yet." Hence the 

danger of dependence upon the "average" advertising manager 

for the handling of the combined sales forces. 

The sales manager, to handle the combined campaign, 
must first be a sales manager — and then be able to change 
desks, if need be, and become the ad man; familiar with the 
bewildering multitude of opportunities for costly error, for 
concealed loss of expenditure, and for the elusive dead-falls 
lying in wait for part of his appropriation. 



CO-ORDINATION 323 

If he cannot do all of this himself he must have the level- 
headed common sense to select, carefully, the very best agency 
available — jpay them straight commissions, and tie up with them 
for service and results. He must know how much help the 
agency will require of him, and give it. He must know what 
to expect from the agency, and insist upon getting that. 

In an experience of fifteen years in actual selling, in sales 
organization and reorganization — sometimes in sales adver- 
tising, sometimes exclusively selling — I have had the op- 
portunity, several times, of correcting a bad sales policy, 
and of lessening the consequent sales cost, by consolidating 
the sales and advertising departments under a single directing 
head. 

In certain instances both organizations were good, the adver- 
tising, logical, well balanced, and properly applied; the selling 
plan correct and proving effective; both departments, individu- 
ally, doing their full duty, but not working in the precise 
harmony necessary to highest sales eJEciency, and particularly 
sales economy. 

And in the final work-out it is found that these two separated 
departments are working along lines sufficiently different as 
to lose the team-work value found in proper combination. 
This is true in all lines of human endeavor, military, baseball, 
missionary, financial, etc. 

These two lines of procedure cannot be perfectly aligned 
when two or more men, two or more personalities, ideas and 
temperaments, must be brought into such intimate relation 
as is necessary to low sales cost, through distribution, and dealer 
co-operation secured by high combined efficiency. 

Therefore, in selecting the sales advertising head the ques- 
The PI ^^^^ ^^ choice should be determined by the quali- 

of the fications of the individual, rather than by whether 

Gra-pe he be a salesman or an advertising man. But 

Juice \)^Q direction of these features of the business should 

toncern ^^gj-tainly be centred in one man. 

In our business here, we entered a field which was controlled 
by two brands of advertised grape juice, and a dozen makers 
of the identical article sold under many brands, but all of the 
same quality and value. 

A preliminary survey of the field demonstrated that nothing 
short of a national proposition could be made feasible without 
a tremendous expenditure of time and money in sectional 



324 ADVERTISING AS A BUSINESS FORCE 

development. A national-initial-introductory campaign was 
decided upon. . . . 

The grape juice "year" only covers eight months, and the 
actual selling is done during the cold months immediately 
preceding the spring season, when soft drinks become popular 
and timely. 

It was found necessary, therefore, to accomplish distribution 
at a time when there is but little consumer demand — and it 
is indeed difficult to introduce a new article except under actual 
advertising then running and in sight. It is also most unusual 
to advertise a new product in a national way, out of season, 
without having first secured at least a skeleton distribution. 

Having no choice, however, the best plan of procedure was 
next to be determined and carried out. 

A complete general campaign was worked out, covering 

magazine and circular copy. A sales force was gathered and 

trained in convention of district sales managers at 

Opening the factory in December. 

oj ". -pjjg entire advertising plan was gone over in detail 

Campaign with these district salesmen, until they were as 
familiar with it as we were — and then a trade 
circular was prepared which carried every detail of the cam- 
paign; covering the product, the factory, the advertising (with 
specimen copy), selling offers, price list, etc., together with an 
exact schedule of publications, appearing dates, and size copy 
for each shown. 

This trade circular was mailed to each of 100,000 dealers 
in the United States on January 1st, going out the same week 
as our first advertisement ( a two-page spread in the Saturday 
Evening Post) appeared. 

Simultaneously each of our district salesmen appeared in 
his territory with one or more thoroughly coached assistants, 
telling the same story as told by the trade circular, the trade 
journals, and the two-page spread. 

This all occurred in January — three months before the 
consumer season could possibly open. The plan and its pur- 
pose were frankly and honestly made clear to the dealer, whether 
jobber or retailer, and he was asked to buy on his judgment 
of the outcome of it. 

Results: In January we booked about $100,000 worth of 
business for immediate delivery, and kept that stroke up until 
the entire trade from coast to coast was covered by our intro- 



CO-ORDINATION 325 

ductory selling. Walker's Grape Juice was actually in the 
hands of over 46,000 dealers by June 1st, less than sixty days 
after the "season" actually opened for general consumer 
demand. 

Nothing but concerted action from all directions can produce 
results of this magnitude within that space of time and under 
those circumstances. 

The analysis of conditions must be right, the theory of the 
plan correct, the agency must do its duty, and the whole scheme 
of things must be interlocked and executed in perfect harmony 
and accord. 

Obviously, fwjo "heads" would have some difficulty in main- 
taining the same exact pace — so we adopted the very simple 
jy,^ expedient of placing the entire selling organization 
Divisions under one head. 

Under The sales force, sales brokers, etc., were under one 
One Head division and in charge of an assistant; the general 
publicity campaign handled by the agency, after the usual 
preliminary conferences and decisions as to copy policy, etc.; 
the circular work, handling of display material, signs, literature, 
etc., taken care of by another assistant in his division. 

The traffic and general business features were grouped in a 
similar manner, and proper connection established with the 
financial department as regards credits, collections, kicks, 
adjustments, dissatisfactions, etc., being referred to the sales 
department for disposition. 

The workings of the entire organization, as above, are then 
segregated and grouped in such a way as to relieve the general 
sales manager of actual details bearing upon a certain part 
of it, but bringing everything of serious import, which may 
require special disposition or a special ruling for future guidance, 
to his immediate attention upon occurrence. 

By this arrangement every condition affecting the sale of 
our products is kept before the sales head, who, in turn, controls 
the sales producing machine; he is kept fully informed regarding 
trade conditions in each territory, and can direct the advertising 
effort or the sales operations to fit the exact needs of any 
section. At the same time he controls the advertising expendi- 
ture, as well as the sales expense, shaping the policy to conform 
to conditions found. 

A full set of estimates, made in advance of actual operation, 
covering business to be done, territorial subdivision, expense 



326 ADVERTISING AS A BUSINESS FORCE 

in its various classifications, and even to quantities of the sized 
packages needed, remained substantially in force and correct 
at the end of our first season. 

Now, it is not possible for a single individual to be "every- 
thing in everything," and to actually handle all these varied 
sections of the marketing organization, nor would the same 
result be possible under a divided effort of two or more men. 
But there is no doubt that best results are gotten when all the 
different features bearing upon the sale of a certain product 
are centralized in such a way as to bring them under the direc- 
tion of one dominating idea, and are executed according to that. 

It then devolves upon that individual to bring about the 
organization, men and methods for carrying out the composite 
plan. 

"Rather one poor general, than two good ones." 

H. P. Dowst of the H. B. Humphrey Company, Advertising 
Agents, in Boston, at a recent meeting of the Pilgrim Publicity 
Association, gave a talk in which he emphasized the distinction 
between "notifying" the selling force about advertising and 
"instructing" them about it. In the course of this discussion 
Mr. Dowst sums up the main facts of this entire group of 
problems : 

*I talked not long ago with the New England manager of 
one of our biggest advertising textile houses. I said, "Your 
house is a great advertiser." He replied, "Yes, that's so. 
I wish they wouldn't put so much money into advertising, but 
pay us salesmen more commissions." 

Do you think the house that man sells for is getting value 
received for the advertising dollar.^* Do you think that is an 
isolated case? I should say not. 

Now if you will get the average salesman into a corner and 
question him about the advertising of his house, about its 
effect on his business; the attitude of the retailer toward the 
house and its advertising; about the use he makes of the ad- 
vertising argument when he is selling goods, what will he do.'^ 
Usually one of two things: he'll duck, or else he'll give you the 
answers he thinks you want. If you draw him out, you can tic 

*Prinier$ Ink, March 14, 1912, p. 64. 



CO-ORDINATION 327 

him up in bowknots of equivocation and evasion. And if you 
were to make a tour of that man's territory and question his 
customers, who are or should be handhng your goods, you 
would soon find out why some advertising doesn't pay. You 
would find just how little those retail dealers know about your 
goods and about the advertising — things that your salesmen 
ought to have taught them. 

This is usually not the salesman's fault, at that. Every good 
salesman wants to know all he can about the goods he sells; 
he wants all the arguments that will help him place goods and 
secure repeat orders. But the manufacturer — the advertiser 
— doesn't instruct him. He "notifies" him. That's all. 

The most useful ally the advertiser can have is 

n if the last person through whose hands his goods must 

an Ally §^ before they reach the consumer, and that is the 
retailer — more especially the retail clerk. 

The salesman may actually succeed in placing the goods. 
He stocks the retailer, folds up his order, and beats it for the 
next store, or the next town. It should be part of his duty 
to interest the retailer in the goods to a point beyond placing 
them on the shelves. He should give the retailer information, 
the enthusiasm, the inspiration to sell those goods — to push 
them. And he should have cultivated in him by his employer 
and the advertising man the powers of observation that will 
enable him to make an intelligent report on the attitude of the 
dealer toward his goods every time he calls there. He should 
be taught how to gauge the effect of the advertising of his 
house in every locality he visits. He should be able to inform 
his employer, not alone that A, B or C is buying his goods, 
but to what extent A, B or C is benefiting by reason of the firm's 
advertising. 

What is the relation of advertising to sales .f* It is really a 
subordinate one. Thousands of firms have made tremendous 
successes in spite of the fact that they have not advertised. 
You'll have to admit it. And it w^on't help us advertising men 
much to say, "Oh, well, just think how much more successful 
you might have been with the help of advertising!" And 
what are you going to say to the house that, after years of non- 
advertising success, spends a big appropriation for advertising 
with no results .f' 

The mill won't grind again with the appropriation that 
is spent; you've got to make the advertising pay while the 



328 ADVERTISING AS A BUSINESS FORCE 

campaign is on, and the only way to do that is through intensive 
cultivation by the selling forces, backing up the advertising. 

When you go to the foundation of this relation 
Advertising i^Qly^QQj^ advertising and sales you find yourself up 
Does^Not ^g^i'ist the negative conclusion that, except in a small 
Sell proportion of cases, advertising jper se does not sell 
goods. 
Advertising attracts attention, arouses interest, creates 
desire — those three things, in the order named — attention, 
interest, desire. A large proportion of advertisements pub- 
lished in various ways do certainly attract attention. Some 
of them do not even do that, but most of them do. 

A large, but somewhat diminished, proportion of published 
advertisements arouse interest. It would be quite impossible 
for any of us to estimate with any degree of accuracy what 
proportion of advertisements actually do create desire. It is 
presumably not very great, but we are striving all the time to 
make that proportion greater and greater. We have not yet 
arrived at a point where we can put a definite finger on just 
the qualities of a published advertisement that stimulate in 
the human mind a genuine wish to possess the goods advertised. 
But when an advertisement has really made its 
of FaUurT ^^^^^^ wish he owned what you offer for sale, has 
that advertisement on that account been successful.'* 
Not necessarily. Why not .5* 

1. Because the person in whom the desire is created may not 
have the money. 

2. If he has, he may consider the purchase an extravagance. 

3. He may forget. 

4. He may be located where the goods cannot be bought. 

5. He may go into a store where they are not on sale, and 
accept some other make of a similar kind of goods. 

6. Even if he goes into a store where they are sold, he may 
be induced to buy something else. 

These six and many other conditions not mentioned present 
just so many separate problems for the advertiser to handle. 
In even the most favorable of circumstances there's many a slip 
'twixt the advertisement and the sale. 

I am afraid that if more advertisers understood this, two 
things would result: First, there would be an enormous 
shrinkage in the amount of advertising done, for when some 
advertisers who are to-day spending great sums for space realize 



CO-ORDINATION 329 

the proportion of waste that they are paying for, they would 
stop advertising. And others would go about their advertising 

with more painstaking care. 
What the With all these stumbling blocks in the way, so 
Could Do nauch in the way, in fact, that even the best of ad- 
vertising copy may, or will, to a greater or smaller 
extent, fail of its effect, what can the advertiser do to bridge 
the gap between his publicity and the consumer he seeks for 
his product? 

Educate, educate, educate his selling forces ! 

We want, in the advertising business, not more honest men, 
but to be ourselves more honest. We need to be more frankly 
willing to recognize the difficulties of our proposition; to study 
more earnestly the essentials of our calling. We hear much 
about "clean advertising" and "honest advertising." But 
that subject will never be adequately covered so long as one 
professional advertising man is left who considers the sole 
requirement of a good advertiser to be an established credit 
and a fat checkbook. 

A man said to me lately, "The advertising man has got 

to see the day when he not only tells his customer how to 

The Work advertise, but can go into his factory and tell him 

of the how to rearrange his machinery to increase his 
Advertising output efficiency." I don't believe that. But I 

Alan ^Q believe that the successful advertising man of 
the future — yes, of the present — must be the man who 
goes soberly and analytically about his customers' business 
with the one idea in mind, to sell goods — more goods — at 
lower selling expense, for better prices, with larger profit. 

Buying or selling space and filling it with copy — ever so 
good copy — is only one detail of such an advertising man's 
work. Organizing, co-ordinating and facilitating selling — 
that is the advertising man's task; and when the laws of this 
just relation between advertising and sales shall have been 
established we shall rob the advertising graveyard of its prey, 
and shall knit into the gospel of business the truism of our 
calling, "Advertising pays." 

REVIEW QUESTIONS — CHAPTER X 

1. What is the basic difference between manufacturing and 
selling problems.'^ 



330 ADVERTISING AS A BUSINESS FORCE 

2. What are some of the main features of the selling organiza- 
tion of the National Cash Register Company? 

3. What is the peculiar feature of the relations between 
the advertising and selling organizations of the American 
Multigraph Sales Company? 

4. How does the National Lead selling method differ from 
that of the Cash Register and Multigraph companies? How 
does this change its advertising problems? 

5. Are there any essential differences between the advertising 
problems of the National Lead Company and the H. J. Heinz 
Company? 

6. Do you agree with Mr. Manning's argument that the 
advertising and sales managers should be one? Why? 

PROBLEM QUESTIONS — CHAPTER X 

1. Make a list of cases in which the relations between the 
Multigraph advertising manager and sales manager might 
become strained under the form of organization described. 
Compare these with the advantages of this form of organization. 

2. What are some of the good features of some of these 
specialty selling organizations which can be made use of 
by concerns selling through the "regular" jobber-retailer 
outlets? Will they need to be modified? Make a list of 
these which could be incorporated into the selling plans of 
a hammer maker selling "regularly." Do the same for a 
breakfast food maker selling "regularly." 



CHAPTER XI 

TRADE-MARK PROBLEMS 

THE trade-mark has become one of the elements of 
almost every successful appeal to the consumer. 
Trade-mark development involves a group of prob- 
lems which are among the most important of those which 
must be solved by any advertiser operating on any considerable 
scale. 

We shall divide our discussion of trade-marks into five 
main parts. First of all, we shall look at some of the uses 
of the trade-mark. And then we shall examine some of the 
legal aspects of exploiting a mark of this kind. The remaining 
sections of the discussion will be devoted to a consideration 
of the problems of trade-mark selection, of problems involved 
in developing a well-defined trade-mark policy, and an exami- 
nation of some of the advertising and selling difficulties asso- 
ciated with trade-mark exploitation. 

THE USES OF THE TRADE-MARK 

The most common use of the trade-mark is in the establish- 
ment of identity. And in this case we find that the trade- 
j,, J, , mark partakes of the nature of a commercial 
mark as a signature for its exploiter. Frederick Arnold Farrar, 
Commercial advertising manager of Adams & Elting Company, 
manufacturers of Ad-el-ite paints, discusses in the 
following terms this phase of the uses of the trade-mark and 
the methods which his company employed in impressing their 
mark on the public mind: 

331 



332 ADVERTISING AS A BUSINESS FORCE 

* He saw it advertised — bought it — liked it and has used 
it ever since. That's the whole story. 

The article was trade-marked. He noticed it in the ad, 
on the circulars, and on the package. It was distinct, it made 
an impression, and when here turned insisted that his repurchase 
bear the same character. But the money spent in production, 
advertising, and selling would have been lost were the article 
wanting in quality. 

The suggestive trade-mark plus goods of permanent quality 
become builders of good-will which, by the way, is no longer 
an obscure thing. It is being accorded more and more sub- 
stantial recognition as an asset. It is an existing advantage 
in established trade relations with the general buying public. 
It is measurable and definite, is reckoned in financial dealings 
and stands in the courts. 

It cannot be disassociated with the handling of any product 
and in outlining the experience of the National Biscuit Com- 
pany, W. W. Green, the president, takes it up first: a view 
which is more interesting because of his previous experience 
as a corporation lawyer. 

They say the New York Herald earns between $500,000 
and $1,000,000 yearly. Materially its chief asset is the 
beautiful building in Herald Square. If that should burn 
up to-night there would be nothing left of the Herald materially 
to-morrow morning. Yet its mere name would be just as 
valuable. That is good-will. In a recent transaction, involv- 
ing $450,000, the tangible asset of the company amounted 
to only $50,000. Four hundred thousand dollars was for 
good-will — a figure set as the value created by the familiar 
trade-mark and the friendly relation existing between the 
consumer and the product covered. 

The trade-mark, however, is only an emblem. It actually 
produces no business nor has it in itself any creative power. 
The value lies wholly in the action it inspires, its ability to 
suggest by continued appearance, to create sentiment, to 
crystallize opinions and eventually to build markets. 

Powerful, persistent publicity tends to invest an article 
with more value in the purchaser's mind who unconsciously 
associates it with merit and becomes predisposed in its favor. 
You know that the manufacturer has put his best into it. 



*Printers Ink, September 29, 1910, p. 20. 



TRADE-MARK PROBLEMS 333 

He could not afford to do otherwise, for business is built on 
faith, and to destroy confidence is to kill customers. 

The Adams & Elting Company has adopted a new trade- 
mark — a rabbit — in order to simplify identification of all 
its products — a thing which is needed by many manufacturers. 
It's a promise that we will make good. 

The Ad-el-ite Rabbit will be found on everything we issue. 
By its persistency every label, color card, advertisement, 
poster, etc., will each bear out a plan and become a link in 
our chain of selling policy to establish credit with the public. 

Such an establishment of his trade-mark must be the aim 
of every manufacturer. 

Not the least important of the uses of a trade-mark are 

those which are associated with its employment 

The Trade- ^^ g^ weapon of offence and defence in active com- 

mark as a . . ^ , 

Weapon — petition. This phase of the trade-mark question 

Offenswe jg discussed as follows by W. W. Garrison of the 
Defensive Hudson Motor Car Company: 

*. . . . "And let's think up a trade-mark," is usually the 
first idea following the birth of the new business. 

Usually you will find the trade-mark is used as a weapon 
of defence, as protection against the substitution of the goods 
by the retailer and to guide consumer repeat orders. 

But there are few national advertisers who have come to 
the "reason why" trade-mark — one which plays the double 
role of protector and salesman of the goods. It is a powerful 
selling force if adequately equipped to occupy a position on 
the firing line. 

An Eastern manufacturer of an article of wear some years 
ago was undertaking national advertising in one of his star 
lines. He and his advertising counsel were working hard to 
conceive a name and a new trade-mark for the product. 

It was for the exclusive use of boys and men. Dozens of 
ideas were presented and one after another discarded because 
they were not possessed of sufficient attractiveness to tie up 
with the line and its field. 

It was just at the time the Boy Scout movement was 

^Printers Ink, April 11, 1912, p. 3. 



334 ADVERTISING AS A BUSINESS FORCE 

being launched and the manufacturer finally came to 
the conclusion that, with the movement growing at a rapid 

A Boy ^^^^' it would be good business to take some reflected 

Scout glory from it for the product. 

Trade- The name "Boy Scouts" was decided upon, and 

mark incidentally it is said that this advertiser was one of 
the first, if not the first, to hook this line to the movement. 
Then came the matter of designing a trade-mark. 

This was given considerable thought. The advertising man 
could not conceive of any method of giving the trade-mark 
an identity as a selling factor until he hit upon the idea of 
designing a trade-mark which could be converted, on metal, 
into a pleasing little charm — "Boy Scout" charm, it was 
called — and presented to youthful purchasers with the 
product. 

The trade-mark was drawn up, the design placed upon the 
goods and duplicates of it on metal were made for use as 
charms. Advertising copy was written in which the combined 
charm and trade-mark, occupying the dual role of selling 
aid and protection, was featured toward the bottom of the 

copy. 

Then a circular to dealers was whipped into shape, showmg 
the complete scheme, the selling plan, the copy, the trade- 
mark charm, and the advertising schedule. 

The dealer was given visions of the hordes of youthful 
prospects whom the idea would attract; the additional feature 
of the charm, how dealers who took on the line were protected 
against substitution by others because of the indelible trade- 
mark impression left by charm as well as other potent features 
in connection with the campaign. 

After the salesmen had begun to report and the dealer 
circulars had begun to bring in the orders, it became a cer- 
tainty that the campaign would be a success — this before 
a line of the advertising had been placed. In fact the orders 
that resulted from the presentation of the scheme of operation 
to retail merchants more than paid for the advertising. It 
financed the campaign. 

When the plan was put up to the consumer, there was instant 
evidence that it was moving the goods off dealers' shelves 
and, as regularly as the sales were made by the merchants, 
the purchasers requested the charms, leaving in the latter's 
hands tangible evidence of the fact that the next purchase 



TRADE-MARK PROBLEMS 335 

of such goods, providing this manufacturer's product was 
satisfactory, would be the "Boy Scout" brand. 

The preservation of the trade-mark charm, even though 
for only a short time, was sufficient to keep the goods in mind 
long enough to insure the memory of the name when the next 
occasion came to buy. In addition, the purchaser's request 
for the charm absolutely prevented the possibility of substi- 
tution without considerable argument pro and con with the 
prospective customer. 

Here was an example of the successful use of a trade-mark 
in selling, as well as in its ordinary protective function. . . . 

A manufacturer of a product nationally known was the 
first to bring his goods into the market; goods of this especial 
type. 

His first act was to select a name and have it drawn 

Tj »»T _ in script letters to serve as a trade-mark. The name 

Shrinkable" ^^^ not " Non-Shrinkable, " but that will serve the 

Failed as purpose, for he picked a name which described 

a Trade- \}iq product and it looked like a sound proposition 

^ for he had no competition whatever. His were 

the first goods of this type to be offered for sale. 

He gave agencies for the goods in many cities to individual 
dealers. 

Then he advertised " Non-Shrinkables " heavily, and made 
strong efforts to impress the trade-mark upon the consumer, 
which he did. He found that he was sending trade into his 
agencies at a fairly fast clip. 

Suddenly he discovered that a retail merchant who also 
jobbed goods was selling a line of articles in his store in a 
Western city which were of the type this manufacturer was 
marketing. The merchant had apparently felt that his com- 
petitor, who held the manufacturer's agency, was getting a 
good deal of business on the "Non-Shrinkables," so he con- 
ceived the idea of duplicating the product. 

But he did not duplicate the trade-mark in any way. For 
the purpose of this story we will say that the goods' chief 
qualification was the ability to resist shrinkage. 

He used a coined name and trade-mark which were not 
descriptive of the goods. Apparently it was by accident that 
he happened to follow that course. 

But when a customer, who had seen the national advertising 
of the "Non-Shrinkables," walked into the department in the 



33G ADVERTISING AS A BUSINESS FORCE 

latter's store which handled goods of this type and asked for 
the nationally advertised product, the attempt was made to 
substitute. It proceeded much in this way: 

Customer — "I want to get a ' Non-Shrinkable ' ." 

The store did not handle the goods, but nevertheless the 
clerk would lay a quantity of this merchant's own trade- 
marked imitation on the counter. The customer would look 
them over. 

"These are 'Non-Shrinkables,' are they.'*" the customer 
would ask. 

"Oh, yes," the clerk invariably replied, "they are non- 
shrinkable." He had described the competing merchant's 
goods by naming the selling point which they both had. They 
usually satisfied the customer — it went with the average. 

The goods were wrapped up, the money paid over and the 
substitution culminated. The clerks got away with it readily, 
for they had a descriptive trade-mark and name to oppose. 

In most industries the adoption of a descriptive trade-mark 
is the "open sesame" for competitive vultures. It allows 
substitution to an enormous degree, for when the customer asks 

if these are goods, the clerk merely has to reply they 

are — . That usually effects the substitution. Even the 

trade-mark design can scarcely thwart such substitution, for 
its memory cannot be impressed indelibly upon the average 
consumer mind — not for sufiicient length of time. 

As a result of the competitive merchant's coup told above, 
a manufacturer learned of his success and soon a substitute 
with the same selling point appeared in the field. It cut a 
big dent in the original manufacturer's trade. Then came 
another and another, until to-day there are scores of substitutes 
whose entire business has been built upon the flaw in picking 
a trade-mark and name and the exclusive agency beginning. 

That illustrates the trade-mark name, which, though success- 
ful when the field was non-competitive, lost ground later 
and was the foundation for the inroads of other makers. 

A score of years ago or more a hard-headed Middle- Western 
business man secured a patent on an especially good article 
of wear for small children. 

Another jj^ ^g^g planning to market it and had already 

Weapon n^^de his manufacturing arrangements when he be- 
thought himself of the protection of his goods in the 
hands of the retail merchant. This evolved itself into the hunt 



TRADE-MARK PROBLEMS 337 

for a .suitable method of identification, other than merely the 
use of the firm name. 

The search was a long one, but he steered clear of the snag 
that beset the manufacturer told of above. He somehow felt 
that his trade-mark design should be a selling force in itself. 
It should describe the goods in some way and indicate to the 
consumer's mind its advantages to small children. 

But how on earth to achieve his purpose was a puzzle. He 
really wanted to make the trade-mark do too much work he 
figured, yet he thought it should be a weapon of offence as well 
as defence. 

One of his first acts when he decided to get into the business 
with the patented garment was to have his wife decide what 
she thought of it for their own child, a girl of between five 
and six years of age. The verdict was highly satisfactory 
and the child continued to wear garments of this kind, because 
the mother had made a discovery of their worth. So he had 
finally decided to enter the business. 

Later the hunt for the trade-mark began. 

One evening the child was being towed to bed by its mother. 
The little girl had forgotten to say " good-night to papa." So 
the little one crept out into the lighted room where the parents 
were seated, made a dash for "her papa" and that instant 
the idea for the trade-mark hit him square between the eyes. 

It was his own little girl in the garment he was going to 
sell. It was the very thing he had been hunting for. A 
photograph of the child encased in the garment first achieved 
the desired end, viz., to describe its use and its advantages. 
It was a real weapon of offence — a selling factor. 

It had the additional feature of protecting the goods in the 
dealer's hands and identifying the product when the consumer 
desired to re-order. 

In accordance with the plan the photographs were made, 
showing thoroughly the function of the patented article, 
how it was put on and made to stay on and its appearance 
in general. 

That was probably as long as twenty years ago. The trade- 
mark was featured on the goods and in the extensive advertising 
which backed up their sale. The trade-mark, this manufacturer 
believes, was a strong advantage. He believes it responsible 
for a large share of the immense success he has had and from 
the copy which has been run and is appearing to-day, it is 



338 ADVERTISING AS A BUSINESS FORCE 

generally considered that the elimation of the halftone would 
considerably weaken its effectiveness. Hence it is a selling 
aid. 

To-day the girl of the trade-mark is a grow^n woman and 
has children of her own, but as a little girl on paper she still 
helps her father sell goods. He is a mighty rich manufacturer 
right now and a large amount of the success of his business 
must be credited to this idea. 

Much the same sort of an idea for a trade-mark was con- 
ceived by a varnish manufacturer. To prove the hardness of 
his varnish after a floor has been coated with it, he adopted 
as a trade-mark a photograph of his son aboard a rocking- 
horse on a newly varnished floor. You've seen it, but perhaps 
didn't know how close to home the trade-mark originated. 

It was a real selling trade-mark, in that it proved, by means 
of the actual photograph, that the floor could not be easily 
marred. Being able to feature it strongly in the advertising — 
because it was an actual selling factor — allowed it to be 
pretty well impressed upon the consumer's mind and thus it 
afford the desired protection against substitution in a large 
measure. 

The Ostermoor trade-mark and that of Pratt & Lambert, 
varnish manufacturers, are trade-marks that serve as weapons 
of offence as well as defence, while the Dutch girl of Old Dutch 
Cleanser possesses that quality because of the reflection of the 
cleanliness of the Dutch. They prove a selling point in each 
case. 

The Victor trade-mark has partial value as to selling force. 

The Peters Chocolate, B. V. D., Wilbur's Chocolate Buds, 
and Barrett Manufacturing Company trade-marks are merely 
defensive trade-marks, having no selling value. They are 
probably not meant to have. 

It is good logic to suppose that a "reason- why " trade-mark — 
which serves for both selling and protection — is doubly 
efficient as protection and has selling force of great value. 
It is merely a way of making the mark serve a double purpose — 
the incidents above prove the success of the plan. 

TRADE-MARKED PRODUCT FAMILIES 

There are cases almost without number of a trade-mark, 
well established in connection with one line of goods being 
used for securing a favorable reception for other lines produced 



TRADE-MARK PROBLEMS 33!) 

by the same concern. This business of developing a family 
of products about a single trade-mark is one of the most 
interesting developments in connection with trade-mark exploi- 
tation. The following editorial from Printers^ Ink touches 
some phases of this subject: 

* . . . . During the past year or more there has been 
a surprising increase of birth rate in manufacturing families. 

P od ct Additional products have been announced almost 
Families every month by already well-established concerns. 

Built on The makers of Ivory Soap, though already heavy 

Trade- manufacturers of other laundry products, have 

^^'' * announced a new member of the family — a vege- 
table shortening. Libby, McNeill & Libby (part of the 
Armour family) have announced the purchase of the old Sea 
Foam baking powder. 

Perhaps more interesting than any instance is the expansion 
of the Corn Products Refining Co. 

According to an official, that company has gone into the 
business of manufacturing jams and jellies, and is interested 
with others in the manufacture of molasses. During the last 
year Corn Products Refining Co. bought complete control of 
St. Louis Preserving Co., in which it had held an interest for 
some time previous. The latter company consumes about 
25,000 barrels of glucose a year. It is the intention of Corn 
Products Co, to erect a new plant for the making of jams 
and jellies at Granite City, Mo., and soon to begin selling 
and advertising them under the Refining Co.'s own name. 

In addition to this extensive acquisition, the same company 
has bought the Novelty Candy Co., and is already taking steps 
to advertise nationally a popular-priced brand of candy. 

Manufacturers who fondly imagine they can beat the world 
with one product might profitably take thought at this tendency 
toward expansion. A salesman can talk five or six allied lines 
to dealers and wholesalers at very little more expense than one; 
and a single trade-mark or good-will reputation is perfectly 
competent to support a line of products and advertise them 
at a far lower cost per unit than a single article could be 
exploited. 

*Printers Inic, April 20, 1911, p. 65, 



340 ADVERTISING AS A BUSINESS FORCE 

Other cases of product families are described by H. L. 
Allen, who relates the experience of a number of concerns 
whose use of this feature of trade-mark value has met with 
success. 

. . . . *Few live, ambitious concerns nowadays manu- 
facture and sell but one article. There will be fewer in the 
future, for both selling and manufacturing economy is against 
it. A "family" of products seems to be the natural and 
sensible evolution — as natural as the Darwinian evolution 
from single cell protozoa to mammals. 

This evolution can come about in either of two ways. A 
manufacturer of a single article may use the strength of its 
reputation (especially if it is well advertised to consumers) 
in making a market for an entire line of articles; or a manufac- 
turer of a large line of goods may select one of his articles 
upon which to build concentrated consumer reputation, and 
after a sufficient lapse of time, may begin to saddle the repu- 
tation of this star product upon its satellites until they, in 
turn, grow to be of the first magnitude. 

A number of instances may be cited of manufacturers who 
have graduated from the Kindergarten of Specialties to the 
University of Allied Products. One of the most striking is to 
be had in the case of the Glidden Varnish Company, Cleveland. 
The "evolution" is not yet complete, but it is arriving. This 
company falls into the second class, as enumerated 
The Case of g^^jQyg j^ produces a great number of allied prod- 

'^^'" " ucts. Jap-a-lac only happens to have become 
star, in this case more accidentally than intentionally. Even 
now, with its big sales, Jap-a-lac is but a fraction of the 
company's output — yet consumers have known little of 
the Glidden Varnish Company's other products. The name 
"Glidden Varnish Company" is now being made much 
more prominent, and the time is coming when the reputation 
of the Glidden concern will be coupled with one after another 
product. 

Practically the same thing is being attempted, in a little 
different way, by Hammacher, Schlcmraer & Co., New York, 
which is advertising and pushing its popular tool sets, the 
manufacture of which comprises a fractional part of the busi- 

*Printers' Ink, June 30, 1910, p. 3. 



TRADE-MARK PROBLEMS 341 

uess. But, on the basis of these cabinets of tools, a popular 
and technical reputation is being built up. 

Prominent among the manufacturers who are gradually 
developing a family of products is the Rubberset Company, 

Hoio the ^^ Newark. Few better examples of advertising 
Rubberset evolutions are to be had. Upon the death of his 

Family father, some four years ago, Andrew Albright, Jr., 
^'"^'" succeeded to the head of the old Rubber & Cellu- 
loid Harness Trimmings Company, and was imbued with an 
enthusiasm to advertise. With the growth of the automo- 
bile business, Mr. Albright believed he saw a serious decline in 
the business of manufacturing harness trimmings. In his 
search for something else to specialize upon he turned to the 
business of brush making. 

His father had perfected an old invention for setting bristles 
in hard rubber, so that they would not come out. In spite of 
the incongruity of a harness trimmings company pushing 
brushes, the latter had been sold in a desultory way through 
salesmen. Mr. Albright's first move was to organize the Rubber- 
set Company, a name which covered all his lines. He had 
shaving and paint brushes — both unadvertised. The question 
arose: Which first? The simultaneous popularity of safety 
razors, which were being advertised strongly then for the first 
time, militated in favor of the shaving brush. It was made 
the Rubberset Company's first specialty, and the paint brush 
was reserved for later exploitation. 

The Rubberset Company's reputation was built up on the 
basis of its shaving brushes. The second member of the family 
to be introduced to the country by the advertising stork 
was the Berset Shaving Cream, a natural evolution of the 
shaving brush. Opportunity for the launching of the paint- 
brush advertising was obviously at hand when the magazines 
began to groan with pages upon pages of paint ads, those of 
the Glidden, Sherwin-Williams, National Lead, and Acme 
Lead companies, not to mention a host of others, all talking 
for home consumption of paint. Professional painters had 
before that not taken readily to Rubberset paint brushes, 
because of their cost. But it was believed that the domestic 
dauber of woodwork and furniture could be shown — helped 
by the prestige of the shaving brush — how a Rubberset 
brush was economical and reliable. 

At present the younger brother of the Rubberset family is 



342 ADVERTISING AS A BUSINESS FORCE 

Master Tooth Brush. He is the evohition suggested by the 
vast amount of advertising which has been lately given 
various dental preparations and the growth of popular interest 
in the hygiene of the mouth. In this case so great has been 
the accumulated power of Rubberset reputation that almost 
the mere mention of the fact that a Rubberset tooth brush 
was on the market produced such a demand that it could not 
be met. It resulted in not a little regrettable difficulty. 

When recently asked as to the extent to which each suc- 
ceeding member of the Rubberset family has benefited by 
the advertising given its predecessors, T. B. Denton, the adver- 
tising manager of the company, referred to the tooth brush 
experience as follows : " Each product has been able to make its 
start miles ahead of where the one before it was compelled 
to start its race for public favor. Indeed this cumulative 
appreciation on the part of the consumers of what our name 
stands for got us into trouble when it came to the Rubberset 
Tooth Brush. We planned the initiation of our tooth brush 
months ahead, and ordered advertising in the March issues. 
No labor familiar with the manufacturing of tooth brushes 
being available in Newark, we had to open a school of instruc- 
tion, and teach our help. Mr. Albright estimated that if 
we had a million brushes on hand before the advertising started 
that would be enough. 

" We made up the million. But so great has been the demand 
for Rubberset Tooth Brushes, as the result of what was prac- 
tically a mere mention of it in the advertising pages, that we 
are to-day 2,000 gross behind in our orders from dealers, in 
spite of the fact that we are making twenty to thirty gross 
a day, an amount far in excess of what we expected to make. 
Because of our inability to make deliveries, we have given 
ourselves no end of trouble with our long-standing dealers. 
We have canceled, for the present, what Rubberset Tooth 
Brush space we had secured, wherever possible. A recent 
back cover on Collier's^ which could not be canceled on such 
short notice, and which had been originally intended for 
tooth brush advertising alone, was divided up into quarters, 
and one each given to the shaving brushes, paint brushes, 
dental cream and tooth brushes." 

The Rubberset Tooth Brush success is naturally bringing 
about the evolution of the dental cream, which is to be the 
next member of the Rubberset family. Later on a Rubberset 



TRADE-MARK PROBLEMS 343 

Hair Brush and a Rubberset Nail Brush are to be exploited. 
But, in these instances, foreseeing a monster demand, because 
of the reputation of the trade-mark now, pains will be taken 
to have sufficient a supply on hand when the announcements 
are made. 

Another example is the J. Hungerford Smith Company, 
Rochester, now advertising Golden Orangeade, a temperance 

Some ^ri^^k, in New England. The expenditure being 

Other made is a considerable one. But when the proper 
Well- psychological moment arrives, the valuable reputa- 

knoiin {ion which Golden Orangeade will have made for 

Cases i^ggjf jg going to be used to boost a whole family 
of temperance drinks by a well-thought-out plan of natural 
development. 

Not infrequently a concern is met with, which is putting out 
such an aggregation of products that it would be well-nigh 
impossible to advertise them all. Some of them may be for 
such special uses, too, that it would be impractical to do so. 
For instance, not even the most enthusiastic believer in adver- 
tising could very well assert that Colgate & Co. is a backward 
advertiser. Yet, if every Colgate product were adver- 
tised like shaving powder and dental cream are, the magazines 
would have to build on additions. Out of some 225 or more 
products, probably not more than an eighth of these, at the 
most, are advertised at all extensively. Yet nobody can tell 
how much the reputation of the advertised products helps 
the unadvertised products. A woman goes into a drug store 
to get smelling salts. She doesn't know brands. She doesn't 
know Colgate has smelling salts, but when the clerk shows 
the latter to her, the sale is a foregone conclusion. What has 
brought it to pass? The reputation based on the advertised 
Colgate products. 

The Johnson & Johnson (New Brunswick, N. J.) red cross 
on bandages, absorbent cotton, and a host of allied products, 
has represented a standard for a quarter of a century or more. 
When, two years ago, a shaving cream was perfected, the temp- 
tation with the older officials of the concern was to push it 
along the already established channels of distribution, namely, 
by salesmen who have long known the trade, rather than by 
advertising. 

But, fortunately, some one saw the light. The result was 
that, after a two years' period of samphng the physicians and 



344 ADVERTISING AS A BUSINESS FORCE 

druggists, Johnson Shaving Cream was first advertised last 
February. Since then, it is reported, Johnson & Johnson have 
received more inquiries, and have witnessed more widespread 
interest in this shaving cream than in any other product 
ever put out by the house. 

LEGAL ASPECTS OF THE TRADE-MARK 

Arthur E. Goddard, in an article entitled "Trade-marks — 
What They Mean in the Eyes of the Business Man and the 
Law," outHnes some of the principal phases of the legal aspects 
of trade-mark selection and protection: 

*In these days when advertising plays an all-important part 
in business, when the man who makes himself heard and 
becomes known is the one who gets ahead, it is natural that 
practically every commodity on the market should have a 
distinctive trade-mark. For trade-marks are the only means 
of protecting the results of advertising and enterprise from the 
unscrupulous hordes of "imitators." 

Although it seems inconceivable that business could be 
carried on without such protection, as a matter of fact the 
law relating to trade-marks is of comparatively recent develop- 
ment. It is true that as early as the year 1590 a clothier in 
England brought a successful suit for damages upon the quaint 
charge that: "Whereas he had gained great reputation for his 
making of his cloth by reason of which he had great utterance 
to his great benefit and profit, and that he used to set his 
mark to his cloth whereby it should be known to be his cloth; 
and another clothier, perceiving it, used the same mark to 
his ill-made cloth on purpose to deceive." But it was not 
until centuries later that the courts would take serious notice 
of such trivial matters as trade-marks, and not until about 1850 
that the law became settled to any extent. Recently there 
has been a great mass of litigation covering this important 
phase of business, and the courts have passed upon trade- 
marks for almost everything from printing presses to peanuts. 

The action for damages gradually gave way to the much more 
adequate relief of injunction for two very good reasons: First, 
because of the difficulty of proving damages caused by the 

*System, May, 1911, p. 489. 



TRADE-ISIARK PROBLEMS 345 

infriugement; and, second, because of the sad fact that imi- 
tators, as a class, are not persons of great financial responsi- 
bility, and judgments for damages against them are generally 
so much waste paper. 

Nowadays the infringer is served with a temporary injunc- 
tion pending the suit, and with a permanent judgment after 
the case has been tried. Then, if he feels unable 

What |.Q gjyg yp }jjg newly acquired business, he finds 

fT/"^ himself in jail for contempt of court. In addition 
Infringer ^o all this punishment the court will give a money 
judgment for such damages as can be shown by 
the injured party. 

Viewed through the learned spectacles of the law, a trade- 
mark assumes a complicated aspect. It has been defined as 
"a name or a device or a peculiar arrangement of words, lines, 
or figures, or any peculiar mark or symbol, adopted and used 
by a manufacturer or a merchant for whom goods may be 
manufactured, to designate them as those which he manu- 
factures or sells. It may be put either upon the article itself, 
or on its case, covering, or wrapper." 

Although this definition does not sound formidable, the 
close cases which arise under this branch of law, as under every 
other, make necessary certain general rules which business 
men should know. 

A trade-mark is recognized and protected by the law not 

only for the sake of the manufacturer or dealer (who is 

generally the only one who finds it worth while to 

^hat a y^Ying such matters to court), but also as a protec- 

'^Must^Be ^^^^ ^^^ ^^^ purchasing public, which, of course, 

cannot afford to litigate every time it is taken in by 

an infringing trade-mark on an article costing a few dollars or 

even less. 

Some confusion exists in the popular mind concerning the 
relation to each other of trade-marks, patents, and copyrights, 
but, of course, each is entirely distinct from the other. Trade- 
marks, unlike patents and copyrights, are not limited in their 
duration, but, once acquired, continue to be the property of 
their originators as slong as they may choose to use them. 

The law requires that a trade-mark shall be something new; 
that is, the mark, design, or device of the trade-mark must not 
have been in common use to designate articles of a similar 
nature. A trade-mark must also be exclusive; that is, it 



346 ADVERTISING AS A BUSINESS FORCE 

cannot be used by two or more persons or corporations at 
the same time. 

The trade-mark must be attached to the article in some way. 
It may be printed, stamped, or pasted on the article, or its 
wrapper, case, bottle, or cover. It may be on a tag, a label 
or even on a stick on which the goods are rolled, but it must 
accompany the article in some way when sold. No amount 
of advertising a trade-mark will suffice to protect the owner, 
unless the purchaser finds the mark actually attached to the 
article. 

The main difficulty in picking out a good trade-mark lies 
in the fact that it cannot consist alone of words which are 
purely descriptive of the article. The reason for this is that 
others who have a right to sell the same article have also the 
right to describe it in the same way. This rule is strictly 
adhered to by the courts, more strictly in many cases than 
common sense warrants. 

For instance, it would hardly seem that the person who 
adopted this jaw-breaking title: " Ammoniated Bone Svper- 
phosphate of Lime" for a fertilizer would either rob his neigh- 
bors of a phrase they might wish to use, or sell enough of the 
stuff to litigate about. But it is a fact that such a trade- 
mark was held invalid because it presumably only described 
the fertilizer. Even the refined word "Desiccated," when 
applied to the sacred New England codfish, will not do alone 
as a trade-mark, since a good dictionary shows it to be descrip- 
tive of a process which any one else might adopt. 

The courts go so far as to hold that words borrowed from 
foreign languages will not do as trade-marks if, when trans- 
lated, they merely describe the article. One would certainly 
think that the original introducer of "Parcheesi" had hit 
upon a capital trade-mark but, since the word is Hindustanee 
for a game in India, and since others have the right to make 
and sell the same game under its real name, this trade-mark 
has been held invalid. 

Some of these cases are very close and depend largely upon 
the " personal equation " seated upon the bench. Doctor Dadir- 
rian, the originator of "Matzoon," which is the Armenian name 
for buttermilk fermented by a special process, lost his case 
against an imitator in the Federal courts in New York City 
on the ground that the word, translated, was merely descriptive, 
while in the New York State Courts, sitting on the other side 



TRADE-MARK PROBLEMS 347 

of City Hall Park from the federal court, it was held that 
" Matzoon" was a perfectly valid trade-mark. 

Geographical names, too, are not advisable because those 
who manufacture in the same place may use the same name. 
For this reason the manufacturer of "Chicago Waists" was 
held to have no trade-mark in this name as against another 
manufacturer of waists in Chicago. 

Another sort of trade-mark which is not always entirely 
satisfactory is one which depends upon a proper name. Any 
other person with the same name may decide to enter the busi- 
ness of making and selling a similar article under the same 
name. If a proper name does appear in the trade-mark, 
there should be additional words, designs, or figures which 
another person will not be allowed to imitate. 

An important requirement of a trade-mark is that it shall 
be truthful. No court will protect from others a man who 
is himself engaged in deceiving the public. On this ground 
many trade-marks of "patent" medicines have been held 
invalid because of the miracles enumerated on the label or 
wrapper. Other trade-marks have failed to get protection 
because they state or imply that the article is manufactured 
in some place or country other than the real place of manu- 
facture. All these "Made in Germany" and "Bottled in 
England" additions to trade-marks render the whole invalid 
if the statement is not substantially true. 

Other trade-marks are worthless because they state that the 
article is patented, when it has never been patented or when 
the patent has expired. The word "patented," however, if 
the dates of the patent are also given, never invalidates a 
trade-mark because every one is supposed to know that a 
patent expires in seventeen years. 

A fanciful name furnishes the best basis for a trade- 
mark as it does not serve simply to describe the article, as: 

Some " Uneeda" Wiscvdt, ''' Eureka" Mowers, " Apollinaris" 

Good Water, " Moxie" Nerve Tonic, " Queen Quality" Shoes, 

Trade- "Royal" Baking Powder, "King Arthur" Flour, "Old 

marks Crow" Whiskey, " Sealpacker chief " Handkerchiefs, 
"Omega" Oil. "Coal Oil Johnny's Petroleum Soap" is also a 
valid, if not a delicate trade-mark. 

There is comparatively little actual counterfeiting of trade- 
marks; that is, the use of labels, marks, and names precisely 
similar to the original. This is because imitators in general 



348 ADVERTISING AS A BUSINESS FORCE 

have a notion that such a practice brings them nearer to a 
criminal prosecution than the safer "accidental" sort of 
imitation. Also, for the same reason, infringement by the 
use of original trade-marked packages, cases, or bottles for 
substituted goods is rare. 

The favorite method consists of adopting a trade-mark 
so similar in appearance to one which has been 

Which thoroughly advertised and is "taking well" with 
Imitation? ^^^ public, as to deceive an unsuspecting purchaser, 
and yet show differences enough, upon close in- 
spection, "to argue about in court" as one judge has put it. 

Judge Lacombe of the United States Circuit Court in New 
York, who has done as much, probably, as any other judge 
in the country to enforce the law against this sort of business 
piracy, has summed up the whole situation in an interesting 
opinion in the Uneeda Biscuit case which is worth reading: 

"Defendants present the usual voluminous bundle of affi- 
davits by persons in the trade to the effect that in their opinion 
no one is likely to mistake defendant's biscuits for complain- 
ant's. As has been often pointed out before, it makes no 
difference that dealers in the article are not deceived. No 
one expects that they will be. It is the probable experience 
of the consumer that the court considers. Here, too, we have 
the manufacturer of the article complained of, who explains, 
as usual that, in adopting a trade-mark by which to identify 
his own product, he has been most 'careful not to trespass 
on any rights of complainant, and that, after considerable 
thought, he selected a name which should make the difference 
between his goods and complainant's distinct and plain, so 
that there could be no possibility of mistake.' 

"It is a curious fact that many manufacturers of proprietary 
articles, when confronted with some well-advertised trade- 
mark or mark of a rival manufacturer, seem to find their inven- 
tive facilities so singularly irresponsive to their efforts to 
differentiate. Thus, in one case, the words 'Cottoleo' and 
'Mongolia' seemed to another defendant entirely unlike 
'Magnolia.* The manufacturer of the article which defendants 
in the case at bar are selling seems to have no better luck, 
for, with the word 'Uneeda' before him, his device to avoid 
confusion was the adoption of the word 'Iivanta.' 

"There are, as also is usual, a number of minor differences 
between the forms and the dress of the two packages, but no 



TRADE-MARK PROBLEMS 349 

one can look at both packages without perceiving that there 
are strong resemblances, which could easily have been avoided 
had there been an honest effort to give defendant's goods a 
distinctive dress. Both name and dress are clearly calculated 
to mislead, and the statements that both were adopted with an 
eye to differentiation, strain the credulity of the court beyond 
the breaking point." 

The law books are full of other cases of infringement, many 
of them much more flagrant than the "Uneeda" case, but all 
very similar in principle. 

gg^g A less well-known case of infringement was that 

Famous of " Limetta," so called, a preparation of lime juice 
Infringe- which was protected by injunction from infringement 
ments ^y qj^ article trade-marked *'Limette." 

Sometimes imitators conceive the bright but illegal idea 
of adopting a name having exactly the same sound but spelled 
differently. For instance, the manufacturer of ''Yusea" gas 
mantles discovered a competitor selling under the name of 
" (7. C. A.'' gas mantles and soon ruined the latter 's business 
by an injunction. 

Nor is it necessary that all the words of a trade-mark be 
imitated in order to obtain an injunction. It may be enough 
if the same sort of idea is suggested by the imitation, so that 
a tailoring firm doing business as the ''Six Little Tailors" 
was protected by the courts against the "Six Big Taylors." 
Nobody seems yet to have chosen the title "Six Silent Barbers." 
Perhaps it would be invalid as a misrepresentation in itself. 

The following imitations were condemned without hesitation : 
Cascarets Castorets 

Apollinaris Appollinis 

Honeymoon Honeycomb 

Moxie Noxie 

Serosis Sartoris 

On the other hand, it is no infringement to employ a trade- 
mark similar to one in use upon an article entirely different 
and used for different purposes. In such cases the public 
cannot be misled. So the proprietor of "Rough on Rats," 
which he claimed would also exterminate other vermin than 
the name implies, lost a suit against the manufacturer of 
"Rough on Skeeters" which was not claimed to be fatal to 
rats or other vermin in general. 

Congress has passed several acts and amendments providing 



350 ADVERTISING AS A BUSINESS FORCE 

for the registration of trade-marks, but since the Federal 
Constitution gives no express power of legislation upon this 
subject, and since the overworked "commerce" clause of the 
Constitution can hardly be stretched to such an extent, lawyers 
in general and several judges have expressed doubts as to the 
validity of even the present act. The earlier provisions were all 
declared unconstitutional by the United States Supreme Court. 

This question fortunately is not a matter of life and death 
for the business man, because substantially the same protection, 
although perhaps less conveniently, can be obtained in the 
state courts under the state laws now in force, in case the 
Federal Registration Act should be declared void. 

In many states there are statutes protecting trade-marks, 
some of them providing for criminal prosecution in addition to 
the unusual civil remedies, but entirely apart from all statutes, 
the courts give protection as a matter of necessity. 

All of which emphasizes the force of the advice: "Get a 
good trade-mark, get it first, advertise it, and hold on to it." 

The complications arising in the registration of the trade- 
mark are the beginning of the trade-mark exploiter's troubles. 
jii The interpretation of the Federal Trade-mark Law 
TronUes by the Patent Office Bureau having trade-mark 
of Kegis ry pggistration in charge keeps applicants for registry 
very anxious and very busy whenever they stray far from 
certain very broad principles. Waldon Fawcett, under the 
title "Trade-marks That Have Been Refused Registration," 
describes in two articles a number of failures to comply with 
the Bureau's ideas of the meaning of the law. Among these 
were the following: 

*Recent statistics of the business of the United States 

rp. Patent Office show a rather marked increase in the 

Number number of applications for the registration of trade- 

of New marks, and the officials of the Trade-mark Division 

Trade- gee a direct connection between this circumstance 

"*" and a number of legal controversies and business 

transactions which have, within the past few months, com- 

*Printers' Ink, May 2. 1912. 



TRADE-MARK PROBLEMS 351 

bined to emphasize, as has never been done before, the value 
of widely advertised trade-marks. 

Perhaps the most potent argument for this form of publicity 
was a statement in a petition submitted to the United State 
Circuit Court in connection with the proposed plan of dissolu- 
tion of the American Tobacco Company. This was to the 
effect that the trade-marks controlled by the American Tobacco 
Company have a value in excess of $45,000,000 out of total 
assets of $227,000,000. 

Another statement that has helped to stimulate popular 
appreciation was made by President Green of the National 
Biscuit Company in a public address at Kansas City. He 
estimated that the trade-mark "Uneeda" — which has been 
flattered by more than 400 imitations and infringements — 
is worth to his company more than $1,000,000 a letter, or 
in excess of $6,000,000 in all. Of similar purport was the 
recent declaration of the Gorham Manufacturing Company, 
in a legal suit for the infringement of their Lion and Anchor 
trade-mark, that this mark was worth between $1,000,000 and 
$2,000,000. The valuation of $5,000,000 placed by an officer 
of the Coca Cola Company upon his firm's trade-mark was in 
the same line of argument as have been the admissions of the 
impossibility of accurately appraising the monetary value 
of such trade-marks as Kodak and the familiar dog — "Llis 
Master's Voice" — of the Victor Talking Machine Company. 

Whereas, more general knowledge of the rich rewards that 
can follow the successful exploitation of a trade-mark has 
served to quicken the trade-mark quest to an average of nearly 
600 applications per month it has also resulted in a slight 
proportionate increase in the number of rejections, such has 
been the eagerness to secure strikingly distinctive trade-marks. 
The officials of the Trade-mark Division estimate that ulti- 
mately 80 to 85 per cent, of all the applications for trade- 
marks meet with success, but current statistics do not indicate 
any such proportion of acceptances, largely because many 
applicants for trade-marks consider it to their advantage to 
have their cases drag along after due application has been 
made. Thus the registrations of trade-marks during the year 
1911 aggregated slightly less than 7,000, but there are more 
than 12,000 cases pending, some of which have had this status 
ever since the year 1905, when the present trade-mark law 
went into effect. 



352 ADVERTISING AS A BUSINESS FORCE 

However, the number of rejections by Uncle Sam's trade- 
mark examiners is really surprisingly small considering the 
number of pitfalls to be avoided by applicants for what have 
been dubbed "commercial signatures." The greatest number 
of rejections arising from any one cause are due to attempts 
to secure registration for trade-marks that come under the 
ban against descriptive words or terms. It is in this sphere 
too that there are to be found some of the finest points con- 
tained in the decisions of the Federal examiners, for it is often 
like splitting hairs to difiPerentiate between a descriptive word 
and a suggestive word. And a slightly suggestive word or 
term, as, for instance, "Uneeda," is considered the ideal trade- 
mark. 

The delicate distinctions made are illustrated by the rejec- 
tion of the word "Rubberoid," which was held to be more 

clearly descriptive than certain other words of the 

Del'^^t ^^™^ class which might appear to the lay mind as on 

Distinctions ^ P^^ w ith this one. In line with this same policy 

was the rejection of an application for "Nexttobeer" 
as a trade-mark for a non-alcoholic drink. Nor can an appli- 
cant hope to dodge the issue by changing the spelling of descrip- 
tive terms. As evidence witness the rejection of "Kantleek," 
which was held to be a mere misspelling of ordinary descriptive 
words, although the attorney for the applicant eloquently 
pleaded that the name was a combination of the German 
words "Kant" and "leek," which have no such significance 
as are ascribed to them in English. 

And while on the subject of foreign words it may be whispered 
that it is futile for any manufacturer to hope to secure trade- 
mark registration for a descriptive word originating in any 
foreign language provided that w^ord is to be found in any of 
the foreign dictionaries consulted by the trade-mark examiners 
in making their decisions. It matters not at all, either, that the 
word may be unknown and unused in the United States. . . 

Although the examiners in the Trade-mark Division cannot 
give advice, any perusal of their decisions and expressions on 

this subject of avoiding the descriptive in terms to 
Fanciful |-,g trade-marked will bring conviction that the best 
Preferred P^^^ is to seek the fanciful. A combination of the 

initials of members of firm, as in the case of the Kalem 
Company, manufacturers of motion pictures, is a favorite 
expedient, and Greek letters and words have been made to 



TRADE-MARK PROBLEMS 353 

serve the same purpose satisfactorily. The man who is 
wedded to the idea of a descriptive word for a trade-mark, 
and who desires to get just as close as possible to this ideal 
and yet win registration, will have his best chance if he will 
slightly change the form of the desired descriptive word, 
perhaps adding an "a" or an "o," and giving the term a fanciful 
twist that makes it possible to interpret it as a suggestive 
rather than a descriptive term. Sapolio is a notable example 
and dozens of others will occur to every reader. 

JNIany persons have been puzzled by the existence of trade- 
mark registration upon words that seem to be clearly descriptive. 
The explanation is that these words were not descriptive 
when the trade-mark certificate was first issued, but have 
since been made so — thanks, usually, to the energetic promo- 
tion and publicity of the owner of the trade-mark. There 
are a number of trade-mark words which might be cited in illustra- 
tion of this situation — for instance, Kodak and Castoria — but 
the best example is Vaseline. As a matter of fact the average 
"man on the street" never suspects that Vaseline is a pro- 
prietary name. It had no special significance when the trade- 
mark was issued, but it has gradually become descriptive in 
the highest degree; has found its way into the dictionaries; 
and has acquired increased value as a trade-mark in conse- 
quence. The possibility of such a happy sequel is always an 
argument in favor of the "coined word" as a trade-mark. 

Next to the prohibition against the descriptive the stumbling 
block that probably begets the greatest number of complica- 
tions is the veto against geographical names as trade-marks. 
In certain lines of business, as, for example, fruit-raising, food- 
manufacturing, canning, etc., there seems to be an 
„ ^^^ . . almost universal ambition to secure trade-marks that 

Ncune^ savor of the geographical. To what lengths such 
restriction is carried is evidenced by the rejection 
of a candy manufacturer's application for the right to use 
the word "Clermont." The refusal was based on the cir- 
cumstance that there is a Clermont County in one of our 
states, although it is not located anywhere near the seat of the 
industry concerned and there was seemingly no connection 
between the two. A hard fight was made for the acceptance 
of the word "Tabasco," but it was refused because it is the 
name of a state in Mexico. 

A certain ingenuity is required, of course, to coin words 



354 ADVERTISING AS A BUSINESS FORCE 

or to infuse the element of the fanciful in a term in order to 
secure trade-mark registration, but equal originality is neces- 
sary in order to secure registration for the name of a firm or 
corporation or individual. The law prohibits the registration 
of any such name unless it be presented in a distinctive manner, 
and to secure such distinctive individuality combined with the 
desirable artistic qualifications is often no mean responsibility. 
It is this class of trade-mark designs, too, which most sorely 
puzzle the examiners who are called upon to decide what shall 
pass muster. They have, however, adopted it as a general 
basic principle that to secure acceptance as a trade-mark the 
name of a corporation or individual must be so presented 
that the mind of the average citizen seeing it or purchasing 
the article to which it is attached will be impressed with the 
design or display of the name rather than with the name itself. 
This means, of course, that unusual lettering, unique color 
combinations, etc., are conducive to acceptance. 

This prohibition against the names of corporations unless 
presented in distinctive manner was responsible up to a few 

months ago for some odd whims of fate. For 

Autographs instance, the company publishing Success Magazine 

Pass ^^^ denied the right to trade-mark its name, although 

any person else in the country might have secured 
trade-mark protection for the word "Success." But "Success" 
as used in connection with the magazine was held not to 
be presented in distinctive manner. The same kink in 
the law operated against companies whose titles included the 
words "Champion," "Acme," etc. However, after some five 
hundred trade-marks had been barred on this score there was 
enacted last year a remedial amendment to the law which 
permits the registration of the name of an applicant if other- 
wise registrable. It may be noted in this connection that 
the Trade-mark Division has never questioned but that 
an autograph signature is to be regarded as a name dis- 
tinctively displayed. Monograms are also accepted almost 
invariably, although the experts at Washington consider a 
monogram the least satisfactory form of trade-mark owing 
to the fact that it may be wrongly interpreted and on the 
general principle that all monograms look alike. 

Many applicants fail in the quest for trade-mark registration 
because they have not been informed that there is no chance to 
secure acceptance for any design that embodies wholly or in 



TRADE-MARK PROBLEMS 355 

part the flag of the United States or any pubhc insignia, state 
seals, coats of arms, the emblems of fraternal organizations, 
etc. The officials have always refused to register the letters 
"U. S." The Red Cross can be registered as a trade-mark 
only in case it can be shown that it was in such use by the 
applicant prior to January 5, 1905. However, in accordance 
with a rather unusual line of reasoning the officials will accept 
the white cross and other designs that might seem to have 
been inspired by the Red Cross. The contention of the Govern- 
ment is, however, that the Red Cross is so well known that 
it would be virtually impossible for any confusion to result 
in consequence of the appearance of such designs as the white 
cross and the blue cross. 

The fact that the Trade-mark Division will register the 

name of any celebrity who is dead, but will not always register 

the name of a living celebrity sometimes results in 

Celebnties }jygiy work on the part of an applicant following 

^Dead"" ^^^^ death of a prominent man. A case in point 
was that of the King Edward cigar, for which the 
manufacturer sought trade-mark protection immediately upon 
the death of the late monarch. In the case of a scramble to 
get applications in following the death of a celebrity the race 
would not, however, necessarily go to the swift. Under such 
circumstances the award would be made in accordance with 
the evidence as to which of the applicants was the first to 
adopt and use the name. 

The names of living celebrities may be registered if written 
permission from the person concerned accompanies the apph- 
cation. This explains the use of the names of popular actors, 
etc., in connection with trade-mark brands of cigars. More 
often than not, however, permission is refused. Admiral 
Dewey is a name that has probably been more frequently 
rejected than that of any other living American. The Trade- 
mark Division has a rule that it will not register the name of 
any President of the United States, no matter whether living 
or deceased, it being held that this is against public policy 
and not compatible with the respect due the office of Chief 
Magistrate. Here again, however, there is a loophole. Dur- 
ing the life of a President or ex-President, registration will be 
granted upon authorization by the dignitary concerned. 
Thus, President Cleveland authorized the use of his name as 
the trade-mark of a cigar, and President Taft has given his 



356 ADVERTISING AS A BUSINESS FORCE 

consent for the use of his name as the trade-mark of the product 
of a manufacturer of artificial flowers. 

One of the tendencies in trade-mark activities which has 
impressed the officials at Washington as growing more marked 
as time goes on is the strong predilection of manufacturers in 
any given line for trade-marks of the class which have become 
popular through custom in that particular field. In this 
matter precedent seems to be paramount and in a field where 
fanciful terms are the favored trade-marks it is almost unlieard 
of for a firm to adopt a proper name or a picture. To illustrate 
how fashion dictates the form of trade-marks it may be men- 
tioned that in the piano industry names are the invariable trade- 
marks; in the canned goods trade pictures are preferred; in 
the electrical field coined words have tlie call, and in the coal 
trade there is a penchant for designs such as the star and the 
diamond. So it is through the entire list of business lines 
and it is the exceptional firm or individual that is willing to 
turn from the beaten path in this respect. 

. . . . *To get the proper perspective, too, on some of 
the inconsistencies that are ofttimes cited it is necessary to 
go back a bit in trade-mark history. The United States 
statutes covering trade-marks have been revised and amended 
from time to time, and the practice of the Patent Office has 
likewise fluctuated — in some instances in direct response 
to changes in the laws. Generally speaking most of the trade- 
marks, the admission of which has been criticised, were regis- 
tered years ago when the practice of the Trade-mark Division 
was by no means so rigid as it is to-day. 

During the interim from 1890 to 1900 trade-mark practice 
was very loose. From 1901 to 1904 it was characterized by 
Changes in ^ vacillating policy. In 1905 Congress passed the 
ike Policy new trade-mark law which was intended to be very 

of the liberal to the manufacturers and other users of 
I^gistry trade-marks. Accepting the spirit of the framers 
of the new law the officials of the Trade-mark 
Division were decidedly lenient. In short they, in effect, 
interpreted the new law as demanding the registration of every- 
thing not merely descriptive. If a trade-mark presented the 
descriptive element combined with other features it was 

"Printers Ink, July 18. 1912, p. 112. 



TRADE-MARK PROBLEMS 357 

accepted for registration. This policy prevailed for a couple 
of years or until, in the natural course of events, the higher 
courts of the nation began to hand down decisions in trade- 
mark cases under the new law. Then it was discovered that 
the Patent Office had been too lenient. As the courts handed 
down one decision after another to the same purport there 
was a continual stiffening of trade-mark practice throughout 
the years 1907, 1908, and 1909, until now practice is probably 
more exacting and more inflexible than at any time in the 
history of trade-marks. 

With this the situation it will be appreciated that the interest 
of the present-day manufacturer is not so much in the trade- 
marks that have come down to us as evidence of the incon- 
sistencies of former practice as in the trade-marks of uncertain 
eligibility which serves to illustrate through their fate the 
latter-day policy of the officials. Some of the trade-marks, 
for instance, which have been rejected as descriptive are 
calculated to cause many a layman to "wonder why." In 
this category, maybe, is "Circular Loom" which was unsuc- 
cessful. Likewise " Naptha" which was held to be descriptive 
of the Fels product and "Rust.'* Never," which was disallowed 
for use on hooks and eyes. 

Some of the confusion caused by lack of regularity in trade- 
marks does not differentiate between registered and unregis- 
tered trade-marks. Some manufacturers never make any 
attempt to register at Washington their common-law trade- 
marks, and others, relying on such protection as the common 
law may give, have continued to use trade-marks which have 
been refused registration at Washington. But these facts 
do not appear on the surface, because most manufacturers, 
even though they may have secured registration, fail to add 
the all-important word "Registered" to the trade-mark inscrip- 
tion on their goods, and so many persons go on marveling that 
the Patent Office could have accepted trade-marks which, 
if the truth were known, have never been so accepted. 

Another source of some confusion, especially to newcomers in 
the field, is found in the "exceptions" to established trade-mark 
rules, for in this field, as in all others, there are some exceptions. 
The most startling exceptions are those made possible by 
what is known in trade-mark practice as the "ten-year clause." 
This was a clause in the trade-mark law, passed in 1905, which 
provided for the jTegi.stration without question of any trade- 



358 ADVERTISING AS A BUSINESS FORCE 

mark which for ten years or more, prior to 1905, hhd been in 
actual and exclusive use by the applicant or his predecessors. 
The effect of this clause was, of course, to let down the bars 
for all sorts of descriptive and otherwise prohibited trade- 
marks provided they had the merit of age and the law, in 
effect, gave a tremendous advantage to old-established manu- 
facturers who had the wisdom to adopt a distinctive trade- 
mark at an early stage. All the same the trade-marks that 
secured registration under this exemption are bound to prove 
something of a thorn in the side of the late comer in the manu- 
facturing field who is allowed no such latitude in his choice 
of a trade-mark. As an example of the trade-marks that were 
made eligible under the "ten-year clause" but would not be 
eligible were they originated to-day there may be cited the 
famous "1847 Rogers Bros." silverware mark; the Elgin and 
Waltham Watches and the Kalamazoo Stove (all, it will be 
observed, geographical terms) ; the Red Cross shoes and drug- 
gists' specialties; and a host of names of Indian tribes, applied 
to products of various kinds. 

TRADE-MARK SELECTION 

With these points in mind as to the purpose of the trade- 
mark and a few of the legal aspects which must be considered, 
we begin to appreciate something of the difficulties which con- 
front an actual or prospective advertiser who wishes to select 
and exploit a mark for the establishment of his commercial 
identity. 

Not only is it necessary to keep in mind the purpose for 
which the mark is selected and the legal restrictions upon selec- 
tion, but there are many other factors which enter 
Fadmsin and serve to make trade-mark selection extremely 
Trade-mark difficult. The following cases of successful and un- 
Selectum g^^^^^ggf^j trade-mark selection, compiled under the 
heading of "The Wise and Foolish in Advertising Names," 
was prepared by Jerome DeWolff, and shows how extremely 
easy it is to go WTong in trade-mark selection, and how many 
elements enter to prevent the trade-mark selector from being 
certain that he is going right. 



TRADE-MARK PROBLEMS 359 

*" What's in a name? "asked the hard of bards. 

It all depends. If it is to be an advertising name, its selec- 
tion is of the utmost importance. It may be true that "that 
which we call a rose by any other name would smell as sweet." 
But, at the same time, that new product of the manufacturing 
world which is destined to have large advertising appropriations 
expended upon it had best not be coupled with a name which 
is, for any reason, displeasing, or inappropriate, misleading, or 
not easily remembered or pronounced. Otherwise, it probably 
may never prove a "best seller," from first to last, no matter 
what its financial backing or its intrinsic elements of superiority. 

Bliss, Fabyan & Co., of Boston, can testify authoritatively 
to the selling power of a good brand name per se. Who doesn't 
remember the "seersucker" gowns that our mothers and old- 
time folk used to wear.f^ It was the popular fabric of Fashion's 
yesterday. So popular, indeed, did the goods become that 
everybody was wearing it. That settled "seersucker." Milady 
straightway turned up her nose at the suggestion of another 
gown made of "seersucker" when she found her maid and 
everybody else's maids were wearing gowns made of "seer- 
sucker," too. So the fabric gradually fell into disrepute and 
sales fell off tremendously. For some years now "seersucker" 
has had almost no sale whatever, and only among the humbler 
folk. 

When, lately, Bliss, Fabyan & Co. attempted to bring about 
a revival of "seersucker," it found itself greatly handicapped 
by the stigma of commonness which was still clinging to the 
goods, even after many intervening years. "Seersucker" cer- 
tainly could not be sold. Finally A. W. Ellis, of the Ellis 
Agency, Boston, suggested a complete change of name, and the 
exploitation of the fabric as if something entirely new. He 
thought up the name "Ripplette." To-day Bliss, Fabyan & 
Co. are reputed to be doing a monster business on "Ripplette." 

At a dinner of the Technical Publicity Association this 
winter, H. N. McKinney, of N. W. Ayer & Son, 

Ease of gently criticised the General Electric Company's 

dation selection of the word "Mazda" as its trade-mark 
and widely advertised name for a lamp somewhat 
similar to the Tungsten. 

Mr. McKinney confessed that he had never been absolutely 



*Printers' Ink. July 28, 1910. 



360 ADVERTISING AS A BUSINESS FORCE 

certain how to pronounce "Mazda," and that he assumed that 
there were others whose perspicuity did not exceed his and 
who did not know how to pronounce "Mazda," either. 

Mr. McKinney also vouched for a story about a well-to-do 
man who one day went to a showroom and asked to be shown 
a certain product, calling it by its trade-marked name but 
pronouncing it wrongly. So great was his chagrin, when the 
ill-mannered salesman took occasion to correct his pronuncia- 
tion, that he turned on his heel and left the showroom in a 
huff. He had entered the place fully intending to leave a 
substantial order for some thousands of dollars' worth of the 
goods. 

In this direction lies one of the greatest dangers when it 
comes to selecting trade-mark names. Not every customer 
is going to have his incorrect pronunciation revised by an 
ill-mannered clerk, to be sure, but, then, not every prospective 
customer is not going to be so cocksure of himself. Rather 
than run the risk of pronouncing a trade-marked name improp- 
erly and be laughed at behind his back by a "know-it-all" 
clerk, even though not openly corrected, many a customer will 
much prefer to call for some competitive brand, the name of which 
cannot be questioned. Result: a lost sale. 

Consider "Bon Ami," the soap for scouring. Two little 
words of three letters each, yet it is pronounced in a score or 
more of different ways. The name was selected some eighteen 
years ago by a man named Gardiner, who was, at the time, 
connected with the J. T. Robertson Company, a small concern 
of Glastonbury, Conn. The company already had any number 
of soaps known by other names. The comparative importance 
of the name of a new addition did not then seem great. And 
it wasn't — not then. A moment's thought suggested "Bon 
Ami" and Mr. Gardiner turned his mind to something else. 

Of all the large family of Robertson soap products, "Bon 
Ami " has survived and grown in popularity. But its survival and 
growth have, in no degree, been due not to its name but rather 
to fortunate conditions of supply and demand, to good mer- 
chandising, and, most of all, to careful and persistent adver- 
tising. 

W. H. Childs, of the Bon Ami Company, now states that he 
would be willing to give many thousands of dollars if only 
the name "Bon Ami" could be changed to any one of a number 
of other names which his experience has shown him would 



TRADE-MARK PROBLEMS 361 

be far better without losing the time, money, and effort which 
has been put into past advertising. "Bon Ami" is objection- 
able, for one thing, because "the masses" do not know enough 
French, as a rule, to appreciate its meaning and hence its 
appropriateness. Furthermore, not knowing French, "the 
masses " cannot be certain which of the five English sounds of 
the letter "o" applies, which of the six sounds of "a," and 
which of the three sounds of "i." It would require a mathema- 
tician to figure out the vast number of different combinations 
which are possible. When the words "Bon Ami" are pro- 
nounced in a number of different ways in the company's own 
offices, what can be expected of the uninformed "masses" 
when they go to their grocers.'' 

Foreign words and phrases for use as trade-marks should be 
looked at askance. Unless there can be absolutely no question 
but that their meaning and pronunciation will be understood, 
they had best be left strictly alone. There is no telling how 
much business Ed Pinaud, for example, has lost in America 
simply because Americans have been uncertain about their 
pronunciation of his name. And the same general rule applies 
to any word or phrase, domestic or foreign, which are to be 
used as trade-marks. The public doesn't know how to pro- 
nounce "Cafe d'Amenonville," so it talks about other cafes 
with easier names. "Hyomei" looks too queer for one to 
easily make a clear mental picture of it. Therefore it is not 
remembered. 

The advertising world has too many excellent examples 

of successful brands which have been christened with coined 

names to question the growing practice of using 

joined ^jjem. The possibilities for originality in coined 

Trade- i^^Di^s are great, and it is the name which is original 

marks without being impossible which the public most 
easily remembers. Furthermore, the coined name 
may be made highly descriptive without being tabooed by the 
copyright authorities. The advertising pages furnish any 
number of examples of this sort of thing, as "Rubdry Towels," 
"Keepkool Underwear," "Keen Kutter Tools," "Slidewell 
Collars," "Come-Packt Furniture," etc. 

The coined name, too, should be easy to pronounce and 
easy to spell. It should not be grotesque or in any way dis- 
pleasing. Possibly the name "Mak-Mor Sales Company" 
can be criticised on this score. Certainly the name "Vassar" 



362 ADVERTISING AS A BUSINESS FORCE 

in men's underwear suggests something effeminate which does 
not tend to induce sales with all men. 

The coined name should be dignified. "Shave-Foam Soap," 
"Useeit Water Coolers" and many other names fail to com- 
mend themselves for this reason. A name may lack dignity 
and meaning simply because it is too unusual, because it borders 
upon the impossible. "Javmarmo," "Viyella," "Oxzyn," 
"latrol," "Khedevial," etc., seem to "the masses" to be 
pure, unadulterated Choctaw. And when there is a successful 
"Uneeda" on the market, then "Uwanta," "Takhoma," 
"Tryabita" and "Eta" brands seem obvious imitations and 
hence undignified, too. 

Mr. Advertiser should have another weighty consideration 

uppermost in his mind when thousands of dollars are at stake. 

He should look out for the long, ponderous name. 

Long "Mennen's Talc" is far better than "Mennen's 

and^hort ^orated Talcum Toilet Powder," for example. Or 

Ones compare as to length the name "Barrington Hall 

Bakerized Steel-Cut Coffee" with "Mauna Coffee." 

It costs money to buy space in which to exploit a long name, 

and, what is quite as important, a long name takes the reader's 

time in the reading of it. The reader's time is a consideration 

of the greatest importance when one has an advertising message 

to tell. 

For this reason the trade-marked name "Mumm" is an 
excellent one. The same thing is true of "Cremo," "Calox," 
"Alco," "Arab," "Cobs," "Cyko," "Flexo," "Guyot," 
"Hind's," "Hoff's," "Jello," "Kodak," "Nulife," "Omega," 
"Presto," "Pyro," "Shac," "Vinol," "Whiz," etc., each of 
which can be pronounced by anybody who can read and is, 
in addition, short, terse, virile, dignified, and distinctive. 
Compare with them such long names as "Telekathoras," 
"Mentholatim," "Kantwearout," "Mississippi Diarrhoea Cor- 
dial," "Nine O'clock Washing Powder," "Siegert's Angostura 
Bitters," "Brunswick-Balke-Collender," "Pozzoni's Com- 
plexion Powder," etc., many of which are difficult to pronounce 
to boot, and are thus doubly difficult to remember. 

jjgy, The task of selecting a name for a product may 

"Walk- seem easy. That is undoubtedly why so many 
Over" Was advertisers jot down the first name which comes 

Selected ^^^^ their heads, and let it go at that. But the wise 
advertiser, when it comes to the selection of a name, is in 



TRADEMARK PROBLEMS 363 

no haste. He is open to suggestions and inspirations from all 
sources. 

Some years ago, in 1895, to be exact, George E. Keith, of the 
shoe company bearing his name and making the famous 
"Walk-Over" shoes, very much wanted a new name for a 
new brand of shoes which he proposed to advertise and push 
extensively. He considered the situation, in all its aspects, 
for many months. He had held himself open to suggestions 
from every direction, but the name which just suited was not 
forthcoming. 

It was September. Interest in the international yacht races 
was running high in America. The evening after the final 
contest Mr. Keith and his wife were seated in their library, 
Mrs. Keith was reading to him the newspaper account of the 
race. It described the poor showing made by Lord Dunraven's 
Valkyrie III against the American boat Defender. In the 
middle of the story came the phrase: "Amid great excitement 
the American boat slipped away and won the race in a complete 
walk-over." 

Mr. Keith jumped to his feet. "That's the very name I 
want for my new brand of shoes. 'Walk-Over, Walk-Over 
Shoes' — it's just the thing." And "Walk-Over Shoes" it 
has been. The name is an excellent one and has undoubtedly 
aided materially in the success which this great brand of shoes 
has since achieved. 

TRADE-MARK POLICY 

The application of trade-marks to the selling of textiles 
offers some problems which are particularly difficult. There 
is, however, no field in which the indirect results secured by 
the exploiter of the trade-mark are more worth striving for than 
they are in the textile field. S. R. Latshaw, the manager of 
the Textile Department of the Curtis Publishing Company, 
discusses in the following paragraphs some phases of the use 
of trade-marks in that field: 

*For more than five years I have carefully watched the 
development and change of selling methods in the knit 

*Printers Ink, July 4, 1912, p. 68. 



364 ADVERTISING AS A BUSINESS FORCE 

goods industry. When I first came to these meetings there 
was some interest and much derision for the newly risen 

Trade- guaranteed hosiery campaigns. The next year 

marks there was more interest and less amusement, and 
in Selling so on, until to-day the interest predominates. I am 

Textiles j^qj. especially concerned in discussing here any single 
phase of the more modem selling methods, but rather in the con- 
sideration of general underlying conditions that seem to point 
to a course which will bring more profit for you in the 
future. 

You remember some of the first automobiles we saw years 
ago, traveling uncertainly about, perched on bicycle wheels, 
emitting clouds of steam and often raising from some passerby 
the cry, "Get a horse." Little did any of us think then of the 
ten-ton truck and the seventy-miles-an-hour touring car of 
to-day. You may question the logic of a comparison between 
a machine and a method, but I can confidently say that in 
1917 we will be equally surprised by the changes which five 
years will have made in the selling of knit goods. 

Changes now going on in other branches of the textile 
industry, both in manufacturing and selling, demand your 
attention and consideration as affecting the future of your own 
concerns. An important change has taken place in the jobbing 
field. Within the last decade the great department stores 
have so strongly entrenched themselves in their rights to 
buy from "first hands" that the jobbers have generally relin- 
quished their proprietary claims, and have seen the mills 
sell direct to our leading fifteen hundred stores. 

This "selling direct" to dealers by the mills has now even 
progressed beyond the leading retailers and frequently extends 
to the remote outposts and "tank towns." This is shown 
notably in the knit goods field; many New York State and 
Western manufacturers are sending salesmen to every town 
where there are dealers worthy of notice. 

The jobbers are, of course, trying to adjust themselves to 

these altered selling methods. The two leaders in the East 

and West are proceeding in opposite directions. In the 

Differing East the H. B. Claflin Company interests are buy- 

Meihods — ing the control of many important retail dealers. 

East and thus gracefully covering a retreat from their former 

^^*^ position as exclusively middlemen. Claflin not only 

"sells the trade" — he ?.s' the trade. 



TRADE-MARK PROBLEMS 365 

Marshall Field, on the other hand, while continuing the 
most notable Western retail establishment, is now buying and 
leasing mills. From the unstable ground of the jobber Marshall 
Field & Co. are becoming distributing manufacturers. In 
making this move they have followed the lead of Lord & 
Taylor and Brown-Durrell, who have both, as you know, made 
great successes in the fine knit goods field. 

The real competition in the future will undergo a manifest 
change, due to these improved selling methods. There is 
little likelihood of any phenomenal improvements in manufac- 
ture. But the selling of to-day is archaic. It must be brought 
down to date. 

While it is true that there are more brands of hosiery adver- 
tised to-day than any other one textile product, and while 
you men deserve great credit for your quicker perception of 
future needs, it is nevertheless astonishing that there is so 
comparatively little hosiery sold under the advertised mill 
brand. 

In 1909 the aggregate production of hosiery amounted to 
more than two hundred million. Of this enormous total, 
less than twenty million, 10 per cent., bore the name of a 
national advertiser. And yet, of all textiles, a pair of hose 
is obviously best suited to modern selling methods. For 
instance, what are the two factors that contribute most to the 
advertisability of any commodity.? First, ease of identification 
by the consumer as well as by the trade. Second, widespread 
and continuing demand. As for identification the identity of 
two stockings is rarely changed from the time they leave the 
maker's hands until they are put on the consumer's feet. It 
is easy and inexpensive to apply a hosiery or underwear trade- 
mark, and the package for box allows great opportunity for 
further identification. You gentlemen do not face the puzzling 
and vexatious problems of the converter, the cutter-up, the 
manufacturing clothier, and the other inevitable middlemen 
who alter and change the very nature of the products of 
the woolen, cotton, and silk manufacturers as they pass through 
their hands. 

As for the demand — well, everybody wears them. 

jj . They are constantly being worn out (consiuned) and 

Outlet ^s constantly being replaced. They are sold in 1,400 

department stores, 28,000 drygoods stores, 8,300 

men's furnishings stores, and 148,000 general stores — a total of 



366 ADVERTISING AS A BUSINESS FORCE 

185,000 outlets in this country. What class of goods could be 
expected to respond more vigorously to the stimulus of scien- 
tific selling? 

It is probable that the very openness, directness, and sim- 
plicity of the manufacture of knit goods accounts for the pre- 
vailing simplicity in selling methods to-day. 

It is comparatively easy to engage in the making of knit 
goods — a httle capital, a loft in Kensington, a boss knitter, 
some machines on easy terms — and you have another manu- 
facturer. This manufacturer may be unsuccessful. He may 
have little knowledge of costs and may follow methods which 
land him in the bankruptcy courts, but in doing so, while he 
is going his pace, you have just one more factor in the demorali- 
zation of your market. 

You can, of course, attain a certain degree of manufacturing 
superiority. You can conceivably buy your raw material a 
bit more shrewdly, but when your line can be so rapidly dupli- 
cated and your machines, your help and your raw materials so 
easily secured by a competitor, your real advantage must lie 
almost wholly in the thoroughness of the belief of the public 
in the intrinsic quality of your goods, which will give rise 
to constant and unassailable demand. 

It would seem, then, that you manufacturers would cling 

Trade- tenaciously to a trade-mark representing good-will, 
marks because that trade-mark is really the only permanent, 
as an inalienable asset you can have. 

Asset 'Pq gj^ calmly in a barren office and allow one's 

self and one's mill to drift is the shame of many a mill man. 
Men so old as to acknowledge their inactivity and their dread of 
any change manage properties with a single eye to the imme- 
diate future and its immediate dividends. The hne of least 
resistance — providing it is lucrative — whether that means 
selling to a broker, to a catalogue house or to a syndicate 
buyer, appeals to the sort of mill men who are neither practical 
manufacturers nor practical sales executives. 

If you make goods on contract for this man to-day, for that 
man to-morrow, your mill, your future, your profits depend 
entirely and absolutely on one advantage: that of superior 
manufacturing ability. 

Your goods, unless they bear your brand and your trade- 
mark, are not your goods after they are sold to the store; 
unless the merits of your line are known to be the merits of 



TRADE-MARK PROBLEMS 367 

your mills, you can't he certain to continue the profit due you. 
You may make goods for " Perlmutter & Potash " as long as they 
can't beat your price. When they can, how many of your 
goods are rejected, what control have you on the situation other 
than your ability to manufacture more cheaply or your will- 
ingness to take less profit? 

The means and methods for simple practical trade-marking 
have been fully developed. The jobber has, with a few excep- 
tions, been willing to "push" the sale of a mill-brand goods, 
when these goods were of a quality to justify the consumers' 
demands that had been previously created for them. The 
retail dealers — I have stated that there are more than one 
hundred and eighty-five thousand who sell hosiery and under- 
wear — with the exception of about twenty -five of the leading 
metropolitan department stores, are glad to carry and sell 
honest goods bearing a mill identity for which an honest and 
genuine consumer demand has been created. Even these 
twenty-five stores carry many of the different lines under the 
mill brands because the demand has been made so insistent. 

The machinery and methods for creating a consumer demand 
for quality goods bearing the brand of the manufacturer are 
basically alike with all great lines of merchandise. 

But, notwithstanding the element of similarity in selling 

methods, there are certain difi^erences in textile conditions 

which must be reckoned with and arranged for intel- 

The ligently. The jobbers are fewer in number and far 

Cannot ^^re powerful and important than in any other indus- 
Be Forced tries. The department stores with their great pres- 
tige and following had their birth in the drygoods 
line. Their individual investments in their own advertising 
in any great city dwarf in amount the national appropriation 
of any three textile manufacturers. The importance of these 
factors make their "coercion " well nigh impossible and widely 
impolitic. No method of "clubbing the dealer into line" can 
be used in the textile field. But with changes in all the factors 
in textile distribution — commission house changes, jobber 
changes, cutting-up changes — there is only one changeless 
factor: the ultimate consumer. To his wants and to her 
wants we all cater; because of him and because of her compe- 
tition exists. 

All our stores compete for the consumer's trade; so do the 
Perlmutters and Potashs; so do the mills. Every selling 



368 ADVERTISING AS A BUSINESS FORCE 

factor studies to please the consumer; the wishes of the con- 
sumers are more potent than the commands of an emperor. 
The consumer wants quality and honesty in the fabrics pur- 
chased; the consumer wants to buy intelligently; the consumer 
believes that the men who make the goods know most about 
them. If you make honest goods and if you put your name 
on these goods, and if you help the consumer to discover these 
two facts, the wish to buy your goods will be expressed so 
unmistakably that a large percentage of the retail stores will 
be glad to buy and sell your goods under your trade-mark 
to the only permanent friend any manufacturer can have — 
the ultimate consumer. 

One of the most successful cases of fortunate choice of trade- 
mark policy, and skilful development of the policy once chosen, 
in a textile line is to be found in the case of "Onyx Hosiery," 
which is a jobber's brand placed on hosiery manufactured for 
the Lord & Taylor Company, of New York. Joseph H. Emery, 
president of the company, has the following to say about the 
policy which the company has religiously preserved since it be- 
gan exploiting the Onyx trade-mark: 

*I am sometimes asked about the upbuilding of the "Onyx" 

hosiery business by people whose questions seem to indicate 

that they suppose every success must contain the 

The Case elements either of the mysterious or the sensational. 

Hodery Now there may be great successes in the commer- 
cial world which have been achieved through the art 
of the conjurer — I do not know. But when it comes to the 
history of "Onyx" hosiery, the record is wholly devoid of 
pyrotechnics. 

And it is a rather satisfying history to look back upon. We 
are about ready to celebrate our quarter-centennial. In the 
twenty-five years the business has grown from $340,000 to 
$8,512,024 a year, and the pleasantest part of it is that the 
growth has taken the form of a steady, healthy progress. 
There has never been a time when nitro-glycerine had to be 
injected to save the patient. . . 

We started in moderately at first, believing that in order to 

*Printers Ink, January 18, 1912, p. 3. 



TRADE-MARK PROBLEMS 360 

create a demand among the dealers in hosiery we should have 
to gain the approval of the public. We also believed that, 
though we had a fine selling organization and the best possible 
goods on the shelves, without advertising we should attain only 
a moderate success. Therefore we considered it necessary 
to combine with the two assets — a high standard of product 
and an efficient selling organization — advertising which should 
reflect the same qualities which we believed we put into the 
product. 

We did not start with any thrillers or record-breakers. We 
appealed to the public just the same as an individual salesman 
would appeal to his customers, without undue dignity on the 
one hand, nor sensationalism on the other. We told the story 
of Onyx quality and Onyx honesty in plain and direct language 
— and with very gratifying results. 

From the start we have maintained the policy of co-operating 
with dealers to the fullest extent possible. We did not permit 
the "Onyx" brand to be used as a football in the indiscriminate 
cutting of prices. We adopted every improvement that experi- 
ence could suggest in order to keep the standards continually 
at high-water mark, and so that our dealers, with the adver- 
tising helps and our ability to deliver all duplicate orders 
promptly, could keep up regular lines of merchandise and make 
a satisfactory turnover. 

The adoption of our brand-name was decided upon after 

a great many different suggestions were rejected, all of which 

tended toward a descriptive term which would signify 

R '^w ^ ^^^^ black. While "Onyx" is the name of a stone 

Started *^^ various hues, it is usually identified with an indelible 
black, hence its adoption. Whether it suggests a fast 
black color to the public or not, it is a short word, quickly rec- 
ognized, and easy to remember, and is solidly identified with 
hosiery of our manufacture. In fact, it is known to-day in 
practically all quarters of the civilized world. 

Our choice of a trade-mark is another instance of the princi- 
ples described above. Note how simple it is — only four 
letters of the alphabet are employed and anybody can pro- 
nounce it on sight. It would have been easy to have selected 
something more sensational — and incidentally more com- 
plicated. It is a theory in art that the simplest things are 
the most difficult to do, and the most worth while after they 
are done. 



370 ADVERTISING AS A BUSINESS FORCE 

A feature of "Onyx" policy is to avoid friction with the 
dealer. A common source of disaffection on the part of re- 
tailers is the manufacturer's inability to fill orders promptly. 
This is especially apt to be the case in such a line as hosiery 
where there are many different styles, each stj'le in a variety 
of colors, and each color in a diversity of sizes. We keep a 
large capital locked up in reserve stock. Some people might 
think we could run on a smaller margin but we figure that it is 
just so much invested for dealer good-will. 

Again we go to much pains to keep posted on every phase of 
hosiery information, which is culled from many sources. We 
know the viewpoint of the consumer, the dealer, and the dis- 
tributor. We study fashions. We have shades to match 
every costume and shoe. Our selling organization keeps us 
posted as regards conditions, and any new demands which are 
springing up are instantly reported. We are always ready to 
add any new line for which there is a demand in any quarter. 
It is our constant endeavor to maintain our business at the 
point where a customer can secure under the "Onyx" brand 
any kind of hosiery desired. That, too, binds us closer to the 
dealer. 

Advertising continuity is another reason — perhaps the 
main reason — for the wide recognition of the "Onyx" trade- 
mark. When the advertising question was taken 
Continuity "P ^^^^ o^r concern, we realized that to make it a 
success it was necessary to start small and broaden 
out as the seasons advanced. We knew it required patience. 
We did not expect miracles. The public takes time to render 
its decisions, and it must be absolutely sure before it consents 
to give lasting approval. We regarded the money spent for 
advertising as an investment, and not an expense. We realized 
that it was impossible to make any lasting success by a "whirl- 
wind" campaign. 

Due thought has always been given to the dealer's end of 
the advertising campaign. We have been careful to advise 
him of every advertising benefit we were putting forth, enabling 
him to keep in touch with these efforts and reap the benefit 
of the increased demand. 

Advertising helps are furnished to all dealers; copies of 
magazine advertisements; advertising co-operation in local 
newspapers; assistance in the matter of special sales, etc.; 
co-operation in every possible manner which will help the dealer 



TRADE-MARK PROBLEMS 371 

in selling his own goods, so that the selling of the "Onyx" 
brand is a matter of keen satisfaction to him. We have 
always believed in making the merchandising operations as 
simple and direct as possible, and in using every known means 
of promoting the sale of an honest product with profit to all 
concerned. 

The conditions in the past year have been the most diffi- 
cult we have ever had to overcome. There has been a tremen- 
dous lot of advertising of guaranteed hosiery, but 

When through it all our sales have steadily increased. It is 
tion&r ^' ^^^y likely that the percentage of increase was affected 

Strong somewhat by the guaranteed hose advertising, but 
the rebound during the past year has, we believe 
more than made it up. The intelligent and critical public has 
weighed up the guaranteed hose proposition pretty thoroughly, 
and, we believe, is returning to its first love. The vast sums of 
money we spent through many years have not been wasted. 

In meeting competition of this and other varieties, we never 
go out of our way to fight it with its own weapons. We simply 
redouble our efforts to be absolutely fair with our customers, 
and to convince them that we are working for their interest as 
well as our own. We have always made the statement that any 
buyer could come on our sales floor and go over the entire 
line blindfolded, with the assistance of any one of our salesmen, 
and feel perfectly safe. 

Our appeal throughout, as is evidenced in the copy which 
has been run for "Onyx" hosiery, has been to the refined middle 
class — neither the exclusive portion of the trade which will 
buy only that which is high in price, nor the part which is 
bargain hungry. We have avoided the sensational and the 
exclusive alike. Our endeavor has been to give every announce- 
ment the atmosphere and the flavor of quality, without going 
so far as to suggest that the price must be beyond the reach 
of people of ordinary means. 

We feel that our business, in one sense, is only in its infancy, 
and we look forward to general and steady increase. Twenty- 
five years of experience has only served to strengthen us in 
our belief that a staple product can and should be advertised, 
and that it is not only unnecessary but a mistaken policy to 
search for "features" which may be made the basis for a 
sensational appeal. 

The principles of successful salesmanship apply to successful 



372 ADVERTISING AS A BUSINESS FORCE 

advertising. You will find the best salesmen do not introduce 
"side issues" into their talk. They try to make the prospect 
concentrate on the most vital idea. The salesman who intro- 
duces many irrelevant things into his talk and asks the possible 
customer to follow him on a mental hare-and-hounds' race 
does not build up a reputation as a "closer." That is why 
we keep our advertising on a straight middle-of-the-road policy. 

If any one were trying to extract a moral from the history of 
"Onyx" success, I suppose it could best be summed up in 
the single word, "Consistency." We have tried to 
The Moral y^^ consistent in the general tone of our talk to the 
Advertising public, consistent in adhering to a plain, common- 
sense policy of merchandising and consistent in never 
giving the people a chance to forget our trade-mark. 

If modern developments in advertising mean anything they 
mean that advertising is nothing more than an adequate 
interpretation to possible buyers of your goods. This being 
so. Lord & Taylor have consistently endeavored to so write 
their advertising that it will not misinterpret the product 
into the making of which we have put a quarter-century of 
our efforts. It seems to me that any element of extravagance. 
or even hysteria, is most unwise. Straining after effect has 
its inevitable result in copy which does not honestly represent 
the goods; indeed the shrewd xA.merican man or woman, instinc- 
tively, is apt to discount such "emphasis" and visit an uncon- 
scious suspicion on the product. 



TRADE-MARK PROBLEMS 

The problems of trade-mark selection, registration and 
exploiting are only three of many groups which are encountered 
very early in his work by the developer of any trade-mark. 
H. L. Allen, who has already been quoted in regard to trade- 
marks, gives the following account of how some difiicult and 
unusual problems in trade-mark development were met and 
solved : 

* It is necessarily one of the provisions of the trade-mark 
law that a trade-mark must be affixed to the goods for which 

*Advertising and Selling, June, 1912, p. 12. 



TRADE-MARK PROBLEMS 373 

it is registered; otherwise the courts will not allow its validity 
when cases of infringement arise. 

There are various ways in which trade-marks are afSxed 
to goods. They may either be printed, stamped, stenciled, 
branded, cast, pasted, sewed or woven on the product; or, 
as a general rule, in case the trade-mark cannot be affixed 
in any of these ways to the product itself, as in the case of a 
liquid, it may be affixed in any one of a number of ways to 
the container of that product. 

It is very interesting to study the ingenious ways in which 
some manufacturers affix distinguishing marks to their products. 
Perhaps one of the most remarkable instances, and yet one 
which creates no wonderment at all because it is so common, 
is the trade-marking of paper by means of water-marks. These 
have been so long in use that we do not realize that the first 
manufacturer of paper to evolve a method of water-marking 
his output was very ingenious, inasmuch as the water-mark 
is an inseparable part of the paper without in the least dimin- 
ishing its worth. 

Sometimes simply a change in the method of marketing a 
product means that it will be difficult to trade-mark. This is 
jjarticularly so in the case of drinks. When a drink is put up 
in bottles which reach the ultimate consumer, the problem of 
trade-marking is easy. All one has to do is to paste a trade- 
mark label to the bottle. 

True, there is the unscrupulous dealer who stoops to refilling 
bottles with spurious substitutes and who sells them as the 
genuine trade-marked product. But there are various devices 
to make this impossible, such as bottles that cannot be refilled 
and stoppers that cannot be replaced. Many of the better 
champagne producers have evolved the unique scheme of 
affixing their trade-mark to the bottom of the corks used in 
the mouths of their bottles. When the consumer has been 
educated to look for this trade-mark on the cork, it makes it 
impractical for the dealer to soak a label off an empty bottle 
which once contained that champagne and to paste it on a 
substitute champagne. It should be realized that the trade- 
mark cork cannot be removed without being mutilated Or 
broken by a corkscrew. 

But suppose that the drink does not reach the ultimate 
consumer in the original bottle but in bulk. How can a 
manufacturer evolve a plan of trade-marking a liquid not in a 



374 ADVERTISING AS A BUSINESS FORCE 

container? It sounds difficult and it is difficult. The more 
one studies it, the more exasperating it seems. Apparently 
one might as easily paint one's advertisement on the flowing 
waters of Niagara Falls as to affix a trade-mark to a liquid 
product that is not marketed in a container. 

This is exactly the problem which confronted Renter & 

Co., ale and porter brewers of Boston, several years ago, 

Puttina a ^^ selling Sterling Ale as a draught drink over the 

Trade- counter. Yet to-day, according to every outward 

mark on evidence, and according to the testimony of B. A. 

Draught Smalley, the advertising manager of that company, 
^ ^ Sterling Ale is a great success as a trade-marked 
draught drink and substitution by dealers of other ales, the 
bugaboo of the business, is a negligible quantity. 

In this instance the seemingly impossible has been accom- 
plished by means of a special faucet, designed, patented, owned, 
and controlled by Renter & Co., and also by means of a policy 
in connection with the installation and use of that faucet. 

The latter has an essential principle about its construction 
which is unique and thus patentable. But the all-important 
part about it is that it has a big blue and white handle on it, 
which carries on two sides prominently, so that it can be 
easily seen and recognized by the consumer, a circular trade- 
mark emblem. 

This faucet is not sold to the dealer; it is loaned to him under 
certain strict legal provisions as to its use for serving Sterling 
Ale and only Sterling Ale. The fact that it is a patented 
device further strengthens the right of Renter & Co. to legally 
stipulate the manner in which the faucet shall be used. 

A patent is a monopoly of monopolies. Letters patent grant 
their owners monopolistic rights of manufacture. Therefore 
the courts allow that anything which "flows out" of a patent, 
such as a license to the dealer even though highly monopolistic 
in nature, is substantiated and authorized by the law, 

iVnd this principle applies not only to licenses covering the 
maintenance of price on but to licenses covering the use of 
patented devices. And this is especially the case when a device 
is not sold but is loaned, as in the ca^e of the Sterling Ale 
faucet. 

It has, of course, been necessary for Renter & Co. to educate 
the public to look for this faucet, to realize what it stands 
for, and to insist upon its use. This has been accomplished 



TRADE-MARK TROBLEMS 375 

by means of steady and extensive advertising in the news- 
papers. . . . 

The faucet is called "The Official Faucet" and is invariably 
illustrated as large as practical in each advertisement. The 
size of the copy is usually three columns by from 6 to 10 inches 
in depth. 

Hire's Root Beer and similar drinks have been trade-marked 
very similarly as over-the-soda-counter draught drinks by the 
employment of special trade-marked urns which are loaned the 
dealers and by the strict legal enforcement of regulations pro- 
hibiting the use of such urns as receptacles for other than such 
authorized drinks. . . . 

Not essentially different from Renter & Co.'s method of 
trade-marking their draught ale have been the methods of 

^ . certain of our more enterprising textile manufacturers 

a 'lextile ^^^ converters to make certain that their marks of 

^ra(fe-ma^^■ identification shall remain with their textiles even 

on Ready- after the latter have been cut and fashioned into 

made garments by the makers-up. Probably the most 
shining example in this field is B. Priestly & Co., 
of Cravenette fame. Strictly speaking, this company should 
not be classed among the textile manufacturers, for the word 
"Cravenette" represents a process rather than any particular 
textile. The process is one of waterproofing, and any manu- 
facturer's textiles can be "Cravenetted." To trade-mark such 
a process so that the consumer shall insist that it be employed 
is no easy matter. 

In this instance the "Open Sesame" into the ranks of the 
successful trade-markers has been effected by means of a 
garment label given to the garment maker whose textiles are 
being made waterproof, and then advertising that label to 
the consumer so insistently that the garment maker can ill 
afford not to link up his garments, by sewing that label in its 
proper place, with the strong consumer demand which the 
Priestley advertising has created. 

There was no compulsion used; no threats made or promises 
exacted. The only compelling power has been that greatest 
of all pullers in business, the desire for bigger profits and larger 
sales. 

To-day the trade-marking of Cravenetted garments is so 
successful that the word "Cravenette" has been elected to a 
place among the select coterie of words which have come to 



376 ADVERTISING AS A BUSINESS FORCE 

have a generic sense as a result of much publicity, such as 
Vasehne, Kodak, Celluloid and a few others. 

The same general scheme of a widely advertised trade- 
mark label has been at the bottom of the success of A. G. 
Hyde & Sons with Heatherbloom Petticoats. But 
bloom' ^^^ ways and means in this instance have been a little 
Petticoats different. A. G. Hyde & Sons do not make Heather- 
bloom Petticoats; they simply supply the textile to 
the trade with loose garment labels. But instead of showing 
the garment maker the unwisdom of not linking up with 
Heatherbloom advertising by attaching the label, as in the 
case of Cravenette, the screws are used and the garment 
worker is compelled to sew on the label in the case of Heather- 
bloom Petticoats or else get no more textile. 

Heatherbloom, a taffeta, was first advertised simply as a 
novelty, with no mention made of petticoats. Instead, its 
virtues as a textile for petticoats were only brought out by 
chance. And, even then, it was only when competitive articles 
began to appear on the market with similar sounding names, 
that A. G. Hyde & Sons foresaw the wisdom of carrying their 
case to the consumer as the court of last resort in order to 
create a consumer demand. And it was not long before this 
concern not only found itself in a position to successfully 
insist that garment makers attach the advertised trade-mark 
label, but in a position also to dictate the minimum selling 
price of petticoats and even the number of yards such petti- 
coats must contain, as well as several other ultimatums such 
as it would not have dared suggest before. 

Belding Bros. & Co., making Belding's Satin, which is used 
for linings to garments, have attained the same end by means 
of a guarantee tag which is provided for those garment makers 
who use Belding's Satin. The tag reads: "This tag insures 
the wear of your lining. Should the lining give unsatisfactory 
wear, return the garment to us, express paid, together with this 
tag and we will re-line without charge." This tag has been 
widely advertised to the trade and to the consumer, so that 
to-day it has come to be a definite and positive evidence 
of quality in a garment and that garment maker who would 
prefer not to attach it, or that dealer who Mould not take the 
pains to have his customer see it when attached, are not good 
business men. 

E. B. Moore & Co., New York, making all wool fabrics for 



TRADE-MARK PROBLEMS 377 

men's clothing, have aimed at the same end by supplying the 
garment makers with their trade-marked buttons for use on 
the garments they make, and then by advertising that button 
to the general public. 

The Clinton Wire Cloth Company, making Pompeiian 

Bronze Cloth for use on window screens used to keep insects 

out, had a peculiar problem when attempting to 

Wire settle upon a distinctive and sure trade-mark guide 
Cloth and ^^ ^j^g purchaser. The problem was happily and 

Traded successfully solved when a removable red string in 

marks the selvage of the wire cloth was decided upon as a 
mark of identification. Because of the nature of the 
product no trade-mark could be stamped upon it unless large, 
and if large it would be obtrusive and objectionable. 

The Samson Cordage Company trade-marks its clothes line 
by means of another ingenious device which consists of one 
red strand of yarn braided in among the white in such a way 
that it comes to the surface just so often in the form of a 
diamond. And, what is more, this mark has been made 
inseparable with the goods by incorporating a reference to it 
in the name of the goods which is Samson Spot Clothes Line. 

The method of inserting the trade -mark into the selvage is 
not uncommon. It is the method usually used by fabric 
makers and carpet makers. In some cases it is stamped on; 
in others it is woven in; in the case of Brenlin Window Shades 
it is placed on every yard of the goods on the selvage at either 
side in small perforated letters. The difficult aim in all such 
instances as these is, of course, to adopt a mark which will be 
conspicuous and valuable as a trade-mark, while at the same 
time unobtrusive and subordinated as a part of the fabric 
and its design. 

As opposed to this is the case of the Firestone Tire for 
automobiles, in which case there has been no need for making 
the trade-mark unobtrusive and the word "Firestone," moulded 
in high relief and many times repeated, has been made to 
serve the practical purpose of minimizing skidding and increas- 
ing wearing qualities as well as of identification. 

London Plumes, which are sold by the London Feather 
Company, have been ingeniously trade-marked by means of a 
small label of celluloid sewed inside the stem of each ostrich 
plume in such a way that the plume will fall apart if the label 
is cut out. 



378 ADVERTISING AS A BUSINESS FORCE 

Siegel, Rothchild & Co. ask purchasers in their advertising 
to identify their Perfect Shape Parasols by the name, which is 
inserted on the inside of the ribs. 

Even coal is being successfully trade-marked by the City 
Fuel Company, of Chicago. This company has conceived a 
City Fuel Man, so-called. He is made entirely of coal — 
body, face, arms, and all. He is being used in all this com- 
pany's advertising, and is constantly associated with a guaran- 
tee certificate which in one case he is signing, in another holding 
up to view, etc. The consumer is asked to insist upon getting 
the guarantee certificate of the City Fuel Man when getting 
coal either from the City Fuel Company direct or from his 
own dealer. 

Indeed there seems to be no end to the ingenious methods 
which are being conceived to trade-mark this, that, and the 
other thing. We have music trade-marked by the Columbia 
and Victor Phonograph people. We have cartoons trade- 
marked with small dogs and similar marks of the artist. There 
are even those who maintain that the graduates of certain 
of our universities are trade-marked by their walks. 

It is not unreasonable to think that ere long we will refuse 
to eat a lamb chop unless it carries a tag showing it is our 
favorite brand, nor a slice of roast beef without "the mark 
on the selvage." The tendency seems to be toward so trade- 
marking products that thej- will be certainly recognized whether 
in or out of their containers 

In short, the business world has got to such a stage that this 
question may well be raised: Just how many trade-marks can 
the average person be expected to remember, even though 
they may be advertised in every publication and on every 
hillside.'' Never before were the qualities of simplicity, dis- 
tinction, and appropriateness so essential to a successful trade- 
mark as now. 

REVIEW QUESTIONS — CHAPTER XI 

1. What are some of the main uses of the trade-mark? 

2. How can the trade-mark be used as a weapon for oflFence 
or defence.'' 

3. What is the use of registering a trade-mark.^ 

4. What are the legal requirements for trade-mark registry.'' 

5. What are the essentials of a good trade-mark? 



TRADE-MARK PROBLEMS 379 

PROBLEM QUESTIONS — CHAPTER XI 

1. Do you think it was a good move for the Rubberset 
Company to exploit dental cream under its trade-mark? 
What are the best arguments for and against doing this? 

2. Could the trade-mark plan employed by Renter & Co., 
and Charles E. Hires, in use in connection with draught 
beverages, be applied to other liquid products, for instance, 
to petroleum or vinegar? What would be the defects in the 
plan as applied to those products? How could it be modified 
to suit? 

3. As a buyer of a ready-made overcoat what form of label 
would give you the strongest possible sense of confidence in 
your purchase? Suppose the maker of the cloth, the dyer, 
the cutter, the jobber, and the retailer each had his label on 
the coat somewhere, would they influence you to choose that 
coat in preference to another exactly like it in appearance, 
but bearing only the retailer's label? Would any of the other 
labels alone have more influence with you than does the retailer's 
label? 



CHAPTER Xn 

PRICE MAINTENANCE 

THE question, What is a fair price? leads at once to the 
more complicated question. How is a fair price to 
be preserved? Neither of these questions can be 
answered without due regard for their legal aspects. And the 
legal side is only one of many phases which these questions 
present. 

To get the subject before us in perfectly concrete form, 
suppose we look at a list of wholesale and retail prices covering 
articles some of which are sold under restrictions as to price, 
while others are sold without such restrictions. This table 
and the discussion of it by Roy W. Johnson of the Printers^ Ink 
staff will serve to get the main features clearly in mind as they 
bear on advertising: 

* Maybe the advertising man says, "What have I to do witli 
fixing the price? That belongs to the production departments. 

Price ^ J°^ ^^ ^^ ^^^^ ^^^ goods." And it sounds rea- 
Mainte- sonable enough until you begin to think seriously 

nance about it. 

and the With some classes of goods the price is fixed to all 

ve iser jjj^^gj^^g ^^^ purposes by conditions outside the indi- 
vidual business. Chewing gum, for example, is priced practically 
uniformly at five cents a package to the consumer, cigars are 
five cents or ten cents, three for a quarter or two for a quarter, 
men's collars are fifteen cents, two for a quarter, and so on. 
But these are prices to the consumer. Jobbers' and dealers' 
prices are not thus fixed by trade customs, and those prices 
have considerable influence upon distribution, with which the 
advertising man is more and more concerned as time goes on. 

With yet another class of goods the price is "all the trafiic 

^Printers" Ink, June 27, 1912. p. 3. 

380 



PRICE MAINTENANCE 381 

will bear." In other words, the price is made to fit the pur- 
chasing power of the class of people to be reached. These 
goods, as a rule, are specialties which represent entirely new 
inventions, or new combinations for special purposes. They 
are sold mostly direct to the consumer through house salesmen, 
though in some cases, like piano-players and phonographs, 
they are handled by retail dealers, or dealers and jobbers. 
But even with goods of this class the advertising man has or 
should have a vital interest in the price. What is the purchas- 
ing power of the class to be reached.'' Would a small reduction 
in the price bring the goods within the purchasing power of 
enough more people to earn greater aggregate profits.'' Would 
a lower price save enough selling expense to pay for itself.'' 
Those are some questions — and vitally important questions, 
too — which the advertising man is best fitted to answer. 

But the great majority of products are sold by the jobber- 
retailer route, in competition with other similar products. 
They must meet the competition of consumer-advertised goods 
and goods which are not advertised to the consumer, the com- 
petition of price-restricted goods and goods upon which the 
price is not maintained. Each form of competition has a direct 
bearing upon distribution, as well as upon sales to the consumer, 
and the advertising man cannot afford to let somebody fix 
the price on the goods without considering those factors which 
belong to his province. 

One very simple rule — and as dangerous as it is simple — 

consists in taking the prices of competitors and averaging 

them, or going a bit below them. It is dangerous 

„. ^. because the fact that one man can make something 

jljjg for fifteen cents is no sign that another can do it 

for the same money. Unless it is possible to duplicate 

or improve upon the efficiency of rival organizations it is folly 

to duplicate rival prices. It is the same ditch so many printers 

have fallen into: "If he can do it for that, I can do it for less." 

It certainly is necessary to compare prices of competitors, 
but they are a basis of comparison only. If it is found that 
a competitor can sell his goods at a lower price than they can 
profitably be sold by one's self under present conditions, it is 
necessary to change the condition before meeting the price; 
that is, unless it is possible to sell the goods at a loss, and make 
it up on something else. Individual conditions must regulate 
individual prices; not somebody else's conditions. 



382 ADVERTISING AS A BUSINESS FORCE 

The actual cost of production is, of course, the basis for 

a price. But it is only a basis. To it must be added the 

. overhead — depreciation of equipment, interest on the 

ofPrke investment, lighting and heating, insurance, etc. — 

and a tentative profit, the "profit we want to make." 

Thus far the board of directors or the general manager can safely 

go by themselves, if they have the figures of a competent cost 

accountant as a guide. Though even this basis is arbitrary to 

a large extent it is reasonably accurate. But at that point 

selling cost steps in, and with it the advertising man. 

Nobody knows how much it is going to cost to sell the goods, 
but the advertising man should have a clearer notion than 
anybody else. In the aggregate, selling cost, in advance of 
actual sales, must be an estimate, but there are certain fixed 
factors which enter into it. 

For example, it costs the jobber 15 to 20 per cent, to 
do business. It costs the retailer, on the average, 30 
per cent. Those percentages represent definite, concrete 
amounts which must be added to the selling cost of every article 
which goes through jobbers' and dealers' hands. Some articles 
are sold on smaller margins than these, but they are commodities 
which are advertised to such an extent that demand for them 
is practically automatic, so that they entail no selling effort 
on the part of the dealer or jobber, and the price is strictly 
maintained so that the dealer gets the full margin every time 
and does not have to meet cut prices. 

As an illustration of this method of price fixing, Daniel 
Kops, of Kops Bros., makers of Nemo corsets, states that 
a profit of l]/2 per cent, on the investment according to in- 
ventory is considered by his firm a good business. The cost 
of production of the corsets is from sixteen to seventeen dollars 
per dozen. The dealer (jobbers do not figure in these goods) 
pays twenty-four dollars a dozen, and sells the corsets for three 
dollars apiece. The comparatively high rate of dealer profit 
on a widely advertised line is explained by Mr. Kops as being 
necessary because the high price of the goods entails a certain 
risk on the dealer's part for which he must be recompensed. 

As a general rule, the higher the price of the goods the 
greater the dealer's margin of profit, but there are exceptions. 
The Gillette razor is one, which, selling for five dollars to the 
consumer, brings the dealer only 25 per cent, gross profit, and 
the jobber gets a discount of but 10 per cent., or 10 and 5 in 



PRICE MAINTENANCE * 383 

large quantity orders. The razor costs to manufacture, includ- 
ing selling expense and overhead, approximately $2.25, and the 
jobber pays $3.10 for it. It should be mentioned, however, 
that the prices to the jobber are delivered prices, as the Gillette 
people pay all carrying charges. 

The Ingersoll dollar watch is sold to the dealer at a discount 
ranging from 25 to 35 per cent. The cost of production is 
from fifty to fifty-five cents, the jobber pays sixty cents and 
the dealer seventy -five cents. Dealers who buy in large 
quantities can get a better price — seventy cents and in some 
cases sixty-five. 

The Bissell carpet sweeper costs $1.50 to $2.50 to produce, 
fiome according to style. The jobber makes a profit 
Other of approximately $3.50 per dozen, and the dealer 
Cases 25 to 35 per cent. 

The terms on which the goods are sold have considerable 
effect upon the dealer's profits. For example, fifty-cent hose 
at $4.15 a dozen, terms 1 per cent, discount for cash in ten days, 
sixty days net, costs the dealer more than fifty-cent hose at 
$4.25, 6 per cent., \%, provided he discounts his bills. 
A good many small dealers do not realize the advantage of 
getting the cash discount, though most of the large stores 
understand that it represents an extra profit on the goods. 
In arranging the matter of terms the class of retailer it is desired 
to reach is important. The small man who is not in the habit 
of discounting his bills would believe that the hose at $4.15 
were actually cheaper, and a sale might be lost. As the adver- 
tising man is to be entrusted with a large share of the task of 
getting distribution, it is necessary that he have some knowledge 
of the subject of terms and some voice in their selection. 

Too high a margin of profit for the dealer is a direct encour- 
agement to cut the price. The manufacturer may say that he 
doesn't care how much the price is cut, so long as he gets his. 
But he does care, because it has a very definite effect upon dis- 
tribution. 

The Ingersoll watch, for example, is sold in upward of 
60,000 stores, all over the country. That includes a great num- 
ber of very small country stores, who handle the goods because 
the price is the same everywhere, and there is no inducement 
for their customers to go to the city for a watch. The margin 
of profit for these small stores is not magnificent, but it is 
absolutely sure, and the goods are so widely advertised and so 



384 ADVERTISING AS A BUSINESS FORCE 

well known that a fifteen-year old girl at three dollars a week 
can sell them as well as a high-priced salesman. Moreover, 
the dealer does not have to spend any of his own money adver- 
tising them. 

But let a big store cut the price, and inevitably the little 
fellow must discontinue the line. He can't afford to carry 
it unless he is willing to meet the prices in the other store. 
By and by distribution is concentrated in a few of the larger 
stores, and when they get tired carrying the goods — as they 
will, because there is no glory in selling goods for long without 
profit — the distribution is gone. Not only that, but con- 
sumers have been educated to expect a lower price, and that 
handicap must be overcome. 

So it doesn't pay to offer too much profit, unless one is in 
the position where a cut price will infringe patent rights. 

Too small a profit is equally dangerous, for the simple 

reason that the small dealer cannot afford to carry the goods, 

and the big dealer and the jobber are afforded an 

Dangers of excellent temptation to get out a private brand in 

ProRt which there will be more profit. The advertising man 
ought to know what profit the dealer makes, and 
what profit he ought to make, for this reason if for no other. 
He doesn't want to be placed in a position where he is going 
ahead creating demand for goods which is being filled with 
somebody's private brand. 

In considering selling cost, advertising expense cuts con- 
siderable figure, and here again the advertising man is inter- 
ested. It is a mistake, however, to consider advertising expense 
as a matter wholly separate from dealer and jobber discounts, 
and as something which must be added to the price. It is part 
of the selling cost — true, but it will not only cut down the 
cost of production by increasing demand, but also make it 
possible to do business on a smaller margin of profit to dealer 
and jobber. 

Take the Big Ben alarm clock, for example. It sells to the 
retailer for $1.50 and to the consumer for $2.50. It is nationally 
advertised. Another alarm clock, very similar in appearance, 
which sells to the consumer at the same price, is sold to the 
retailer at $1.30. It is not advertised nationally, hence it is 
necessary to give the retailer a bigger margin to allow him to 
advertise it himself in his local papers, and to cover the greater 
effort necessary to sell it. Twenty cents per clock would do 



PRICE MAINTENANCE 385 

a lot of national advertising, and leave a tidy sum to 
go into profits. Indeed in many lines the saving which may be 
effected right there will more than pay for the advertising 
done. 

And it does not "come out of" the dealer, either. J. P. 
Archibald, a member of the executive committee of the Pennsyl- 
vania Retail Jewelers' Association, speaking for the retailers, 
says: "We favor the fixed price on all standard goods. We 
can reduce the cost of doing business very materially by selling 
price-fixed goods. A boy or girl at a salary of $3 or $4 a week 
can sell advertised, fixed-price goods as well as the high-priced 
salesman, thus the retailer reduces his cost of doing business. 
Moreover, it is not necessary for the retailer himself to advertise 
goods which are nationally advertised." 

Another instance in which an advertising "expense" proved 
an actual saving is that of the Dover Manufacturing Company, 
of Canal Dover, Ohio, makers of asbestos sad-irons. When 
the asbestos iron was first put on the market it was priced 
high in order to give the dealer a good margin of profit. It was 
not nationally advertised, and some dealers pushed the goods, 
making an exorbitant profit, while others cut the price. Many 
did not carry the line at all because of the price cutters. Later 
the average price at which the irons were being sold was taken 
as the price to be maintained — it was considerably lower than 
the original price — and advertised to the consumer. Distribu- 
tion was immediately strengthened, and while some dealers 
made less profit per set on the irons they made more money 
in the end because it cost less to sell them. Moreover, 
dealers who never would touch the goods before now took 
them on, because the price was protected. The resulting 
increase in sales more than offset the advertising expense, even 
though it meant an (apparent) reduction in the dealer's 
profits. 

Another instance, which is familiar to everybody. The 
retail dealer makes from 50 to 100 per cent, gross profit on 
the old-style, open-blade razor. He makes only 25 per cent, 
on the Gillette. If the Gillette were not advertised, the 
retailer wouldn't touch it at a less margin than he is allowed 
on other razors which are not advertised. The difference 
between 25 and 50 per cent, on an investment of $3.75 (the 
amount the dealer pays for the Gillette razor) will pay for 
a good deal of advertising. There is, moreover, the jobber 



386 ADVERTISING AS A BUSINESS FORCE 

to consider. He could hardly be expected to handle an un- 
advertised article on a 10 per cent, margin! 

The table of prices based upon data collected by William 
H. Ingersoll, of Robert H. Ingersoll & Brother, is suggestive. 
It is interesting to note the dealers' profits on the un- 
advertised articles as compared with that on the advertised 
goods. There seems to be some ground for the conclusion 
that the man who will not advertise is paying for it just 
the same : 

Table of Prices on Articles Sold With and Without 
Price Maintenance 

Bepresentative list of goods sold by various lines of retail stores, some of ichich 
have the resale price restricted and some unrestricted. Arranged to show the 
comparative profits on the restricted and unrestricted articles as they are sold 
ordinarily by the average stores throughout the country. The percentage of 
profit given are only approximate, since the terms on ichich the goods are 
sold vary from time to time, and in different sections of the country. Most 
manufacturers allow a cash discount off the invoice prices here given. 

RESTRICTED UNRESTRICTED 

Food Products Price Con- Approx. Price Con- Approx. 

paid by sumers' per cent, paid by sumers' per cent. 
Articles retailer price profit retailer price profit 

Beech Nut Bacon (per jar) .25 .30 16f 

Beech Nut Beef (per jar).. . .25 .30 16| 

Beech Nut Peanut Butter. . .20 .25 20 

Beech Nut Chewing Gum . .03 .05 40 

Mother's Oats (18 packages $1.45) .081 .10 19 

Franco- Amer. Soup, tomato : 

I pint 075 .10 25 

Pints 14J .18 21 

Quarts 25 .30 16f 

Franco-Amer. Plum Pud- 
ding No. 1 size 25 .30 16| 

Campbell's Soups (1 doz. 81 cents) .067 .10 33 

Kellogg's Corn Flakes ... (36 to a case $2.80) 

.077 .10 23 

Kellogg's Rice Flakes 076 .10 24 

PostToasties (2 doz. at $2.80) .117 .15 23^ 

Maple Wheat Flakes (36 packages for $2.80) .077 .10 23 

CoflFee 21 .28 25 

Coffee out of another bin 21 .30 30 

Coffee out of another bin 21 .35 40 

Cinnamon 28 .60 53J 

Brighton Salt, 3 ft. bag . . (100 bags in a barrel) .037 .05 26 

Brighton Salt, 2^ ft. bag . (115 bags in a barrel $3.75) .033 .05 34 

Crosse & Blackwcll's Pickles (i pint dozen $2.10 .175 .25 30 

Worcestershire sauce 141 .25 43? 



PRICE MAINTENANCE 387 

RESTRICTED UNRESTRICTED 

Food Products — Corit. Price Con- Approx. Price Con- Approx. 

paid by sumers' per cent, paid by sumers" per cent. 
Ai'ticles retailer price profit retailer price profit 

Royal Baking Powder 071 .10 29 

Royal Baking Powder, 1 lb. 

size 387 .60 35| 

Another baking powder, 

similar formula (doz. cans $3.75) 

Dutch Hand Soap (48 lOc.pkg.in case $3.40) .07 

Dutch Hand Soap, smaller 

Fels-Naptha Soap (100 in box, $4.00) 

West of Mississippi deal- 
er's price is slightly 

higher. 
Can Corn, 10c. straight. . . . (dozen 80c.) 

Premier Brand Corn 

Premier Pineapple No. 2 

Premier Lemon Cling 

Peaches No. 2| 

Tea 

Toastettes, No. 2 size (2 

doz. to the case) 

Cracker Jack (100 packages $3.25) 

Huyler's Triscuit (doz. 10c. pack. 88c.) 

Walter Baker's Cocoa, i lb. 

tin (6 lb. to box) 

Walter Baker's Chocolate, 

f lb (24^ lb. to the case) 

Hershey's Milk Chocolate (48 5c. pack. $1 .60) 

Continental Sardines .... (1 doz. to case) 

Salada Tea, j lb 

Postum Cereal No. 1 (24 to case $2.70) 

Jello (3 doz. to case $2.70) 

Snider's Catsup, ^ pt (New York City prices) 



Wearing Apparel 

Beacon Shoe 2.25 3.00 25 

Beacon Shoe 

Beacon Shoe 

Cross Gloves 

Cross Gloves 

Warner's Rust Proof Corsets 

Warner's Rust Proof Corsets 

Silver Brand Collars 

Silver Brand Shirts 

Ide Brand Shirts 

Ide Brand Shirts 1 12§ 1.50 25 



.312 


.60 


48 


.07 


.10 


30 


.038 


.05 


24 


.04 


.05 


20 


.067 


.10 


33 


.096 


.15 


36 


.167 


.25 


33i 


.25 


.35 


28| 


.50 


.75 


33A 


.104 


.15 


30| 


.0325 


.05 


37 


.073 


.10 


27 


.18 


.27 


331 


.14 


.20 


30 


.033 


.05 


34 


.07 


.10 


30 


.45 


.60 


25 


.112 


.15 


251 


.075 


.10 


25 


.104 


.12-.15 


13|-17i 



2.60 


3.50 


255 


2.85 


4.00 


28| 


1.18 


1.50 


2U 


1.24 


2.00 


38 


.71 


1.00 


29 


1.00 


1.50 


33^ 


.09 


.12i 


28 


.75 


1.00 


25 


1.04 


1.50 


30t 



388 ADVERTISING AS A BUSINESS FORCE 



Wearing Apparel — Cont. 
Articles 



RESTRICTED 

Price Con- Appros. 
paid by sumers' per cent, 
retailer price profit 



TTXRESTRICTED 

Price Con- Approx- 
paid by sumers' per cent, 
retailer price profit 



Ide Brand Shirts 








1.37§ 
.35§ 


2.00 
.50 


SI 


President Suspenders 








29 


Neckwear 








.37i 
.33^ 
.15 
71 


.50 

.50 

.25 

1 00 


95 


Paris Garters 








SS 


Paris Garters 








40 


Pajamas 








90 


N. B. Umbrellas 








.75 


1.00 


25 


B. B. Bathrobe 








2.50 


3.50 


28; 


Monarch Belts 








.35 

.371 

.18 


.50 
.75 
.25 


SO 


Monarch Belts 








'JO 


Onyx Hosiery 








28 


Onyx Hosiery 








.23i 


.35 


SS 


Merode Underwear 








.35^ 


.50 


29 


Merode Underwear 









.70 


1.00 


30 


Hardware: 














Gem Jr. Razor 


.75 


1.00 


25 








Carborundum Stones 


.75 


1.25 


40 








Ever-Ready Razor 


.75 


1.00 


25 








Moore Push Pins. . . 


.75doz 
1.50 


.1.20doz. 
2.25 


37§ 
33f 


.... 






Asbestos Sad-irons No. 1.50 




Asbestos Sad-irons No. 80.. 


1.00 


1.50 


33i 








No. 3 Stanley Plane 








1.00 


1.36 


26 


Starrett Caliper 








.48 


.64 


25 


Starrett Micrometer 








4.05 


5.00 


19 


50 ft. Steel Tape Measure. 








1.87 


2.62 


28 


Cotton Waste 








.07^ 


.081 


14 


Dodge Pulley 








4.32 


5.70 


24 


No. 14 Stillson Wrench . . . 








.57 


.81 


30 


No. 3 Blount Door Check 








3.00 


3.75 


20 


1 in. Manila Rope 








.071 


.12 


37 


Phila. Lawn Mower 








4.00 


6.00 


33 


Rubberset Brushes 








1.00 


1.50 


33 


Atlanta Wash Boilers .... 








1.00 


1.50 


33 


Three-in-One Oil 








.15 


.25 


40 


Major's Cement 









.10 


.15 


33 


Liquid \'eneer 








.331 


.50 


33 


Jap-a-lac 


.27 


.45 


40 








Yale Night Latch 








.92 


1.25 


27 


Yale Locks 








1.00 
.06 


1.35 
.10 


9S 


Welsbach Mantles 








40 


Welsbach Mantles 








.09 


.15 


40 


Welsbach Mantles 








.18 
.08 


.30 
.10 


40 


Le Page's Glue 






20 


Le Page's Glue 








.15 


.20 


25 


Le Page's Glue 








.12 


.15 


20 


Le Page's Glue 








.20 


.25 


20 



PRICE MAINTENANCE 



389 



RESTRICTED 

Price Con- Approx- 
Statdonery: paid by sumers' per cent, 

retailer price profit 

Venus Pencils 

E. Faber Mongul 

Spencerian Pens 

Stafford Ink 

(In the West the price of 

ink per quart is usually 

75c.) 
Simplex Pencil Sharpener .. .06 .10 40 

Alexis Bond 

Alexis Ledger 

Stratford Cover 

Y. & E. Cabinets 2.10 3.00 30 



UNRESTRICTED 

Price Con- Approx- 
paid by sumers' per cent, 
retailer price profit 

.051 .10 45 

.04 .05 20 

.72gr. 1.00 28 

.42qt. .60 30 



.15 

.15i 
3.75 



.19 
.19i 
5.00 



21 
21 
25 



Sporting Goods: 



Spalding League Ball 1.00 

Peck & Snyder Skates 40 

Smith & Wesson Revolver. 13.00 

3 A. Kodak 13.33 

Kodak Films 13^ 

W. & D. Tennis Ball . 

W. & D. Tennis Racket . . 6.00 

Edison Phonograph 10.50 

Columbia Graphophone .. 15.00 
Iver-Johnson Revolver . . . 4.00 

Gillette Razor 3.75 

Seed Dry Plates - 

Stanley Plates 

Photo Albums 

Stereopticons 

C. C. Tennis Ball 

Tennis Racket 

Eureka Golf Ball 

Ansco Cameras No. 1 

Cyko Paper 

Ansco Films 

Union Hardward Skates 

Electric Flash Light 

Fishing Rods 

Thermos Bottles 1.50 

Keen Kutter Knives 4.00 

Keen Kutter Camp Axe 

Klaxon Warning Signal . . 26.25 

Kiaxonet 15.00 

Ingersoll Watch 75 



1.25 

.75 

15.50 

20.00 

.20 

4.25doz. 5.00 

8.00 

15.00 

25.00 

6.00 

5.00 



20 

46| 

16 

33| 

321 

15 

25 

30 

40 

33i 

25 



.80doz. 1.10 

.50 .55 

.50 .85 

39.00 65.00 

l.SOdoz. 3.60 



2.00 
6.00 



25 
331 



4.25 
.15 

3.34 
.20 
.15 

1.00 
.21 



.33 



7.00 
.35 

5.00 
.30 
.20 

1.25 
.30 

1.25 



.50 



35.00 


25 


20,00 


25 


1.00 


25 



27 
9 
41 
40 
50 
39 
57 
33 
33i 
25 
20 
30 
32 



34 



390 



ADVERTISING AS A BUSINESS FORCE 



Drugs 



RESTRICTED UNRESTRICTED 

Price Con- Approx. Price Con- Approx. 
paid by sumers' per cent, paid b\' sumers' per cent, 
retailer price profit retailer price profit 



.66 
.70 



Alcohol Stove 

Sanatogen 75 

Miles' Medicine 66 

Vinol 

Williams' Sha\'ing Stick 

Jersey Cream Soap 

Prophylactic Tooth Brush.. .164 

De Wilbus Atomizer 

Sanitax Brushes 

Eskay's Food 

(Large size — list price 
75 cents, but sold in some 
places as low as 60 cents.) 

In dozen lots 

$12 worth at a time 

$25 worth at a time 

Palmolive Soap 

Hot Water Bottles 1.00 

Fountain Syringes 1.00 

Ice Bags 90 

Lyon's Toothpowder 

Belladonna Plasters 

Inf. Syringes 37^ 

Box Paper 



1.00 
1.00 



.25 
1.00 
1.00 



.50 



25 
34 



34 
34 
30 



1.50 33^ 

1.50 33| 

1.35 33^ 



25 



33^ 



.50 



.30 



.50 



33i 



.70 


1.00 


30 


.16 


.25 


36 


11 


.15 


26i 



.541 


.60-.75 


10-28 


.467 


.60-.75 


22-38 


.454 


.60-.75 


24J-40 


.07 


.10 


27 


.15* 


.25 


38 


.08i 


.15 


m 



40 



PRICE MAINTENANCE AT THE PATENT HEARING 



During the spring of 1912 the Patents Committee of the 
House of Representatives held hearings in Washington on 
various questions involved in a proposed recodification of 
the United States patent laws. One of the features discussed 
was the extent to which a patent carried the right of price control. 
The "Dick case" decision made this section of the committee's 
hearings one of the most spirited parts of its work. That 
decision had confirmed the right of the seller of a patented 
article to a degree of control over it after sale. This made 
the committee particularly eager to get from manufacturers 
definite statements of their views on price maintenance. As 
a result some new experience records were made public. 



PRICE MAINTENANCE 391 

*0f the business men who have appeared before the House 
Committee in Washington at its hearings on the proposed 
new patent legislation none has made a more favorable impres- 
sion than William H. Ingersoll, of the firm of R. H. Ingersoll 
& Bro., of New York, watch manufacturers. It was intimated 
to Mr. Ingersoll in the course of his testimony that he had 
made out a pretty good case and members of the committee 
said more to the same purport in private conversation following 
the hearing. Mr. Ingersoll had to stand the rather severe 
cross-examination that has been the fate of almost every 
manufacturer who has appeared before the committee and he 
found the committee characteristically inquisitive regarding 
the business secrets of the firm. In answer to questions he 
stated that the dollar watch costs between 50 and 55 cents 
to produce — a little more than formerly owing to the increased 
cost of material — and that the retail outlet embraces some- 
where between 60,000 and 100,000 stores. 

Conversation on the part of your correspondent with members 
of the committee following the appearance of Mr. Ingersoll 
disclosed the fact that there was one feature of his testimony 
which has aroused the deepest interest as seemingly significant 
of the business policy of the future — a straw, as it were, 
that shows the trend of the trade wind. This disclosure was 
the testimony of Mr. Ingersoll that whereas his firm markets 
its dollar watch, a long-time, standard article, on the old sliding 
scale of discounts whereby the small retailer has to pay 75 
cents, whereas, the big retailer who buys in quantity can get 
a price as low as 65 cents, it has, in placing on the market its 
newer products, adopted an absolutely uniform price policy. 
The instance in point, that particularly impressed the committee 
as cited by Mr. Ingersoll, was the method employed in the 
distribution of the watch that retails at $25. Here the jobber 
is virtually eliminated and the watch is supplied to the retailer 
at $16.67 net — an absolutely net price that is universal in 
application no matter whether the retailer buys one watch 
or a thousand. 

Charles T. Johnson, president of the Dover Manufacturing 
Company, of Canal Dover, Ohio, in the course of testimony 
before the committee outlined step by step the evolution of 
sad-iron manufacture as developed by his concern which now 



*Pnnters Ink, May 30, 1912, p. 40. 



392 ADVERTISING AS A BUSINESS FORCE 

ranks as the largest exclusive sad-iron concern in the world. 
He told how, looking about for a business opening, he had 
been impelled, fifteen years ago, to enter upon his present line 
because he became convinced that the sad-iron was something 
that needed evolution and improvement. Sad-irons as a 
commodity had so degenerated that irons which had once 
sold for prices ranging from $2 to $5 per set were selling, full 
nickel-plated, at 50 cents per set and 42 to 45 cents on sale 
days in the Chicago department stores. Thereupon he con- 
ceived the idea of bringing out a good, modern sad-iron. 

It took him six years to get his original basic patent, and 
that patent, thanks to official red tape, etc., cost between 
$2,000 and $3,000. This was the "Asbestos sad-iron." Some 
years ago, in response to popular demand, the concern grappled 
with the problem of the self-heating iron, and after five years 
of experimenting brought out the "A-Best-0 automatic, 
heat-controlled electric iron." These latter retail at $6,50 
and are sold to the trade at 27| and 30 per cent, off, the former 
ciuotation for lots of one dozen or more. The retail price is 
fixed under the usual license plan. A representative model of 
the asbestos sad-irons retail at $1.75 per set and the extreme 
jobber's price is $11.67 per dozen, while the price to the retailer 
is $14.40 per dozen. There is a provision in the jobber's 
agreement under which they agree not to quote or sell catalogue 
house or department store trade. 

Asked how he came to adopt the fixed-price policy, Mr. 
Johnson said: "In the early stage in putting out goods on 
the market, they were looked upon as high-priced, compared 
with other commodities of the same type which already 
dominated the market. After a term of years we found that 
certain merchants were selling our goods at or below cost, 
whereas others were making a reasonable profit. Upon investi- 
gating matters we found that the dealers who were getting 
a reasonable profit on the goods were meeting with a ready 
sale, whereas those who were selling them at or about their 
cost considered them dead stock and were having a hard time 
to dispose of them at any price. 

"This not alone confused, but had a tendency to discourage 
the dealer who was really distributing the goods. We arrived 
at the fixed price by adopting the average price at which the 
successful merchants were selling the goods and found that 
this gave them a reasonable profit. Some of the most successful 



PRICE MAINTENANCE 393 

merchants were getting considerably more. Our object in 
adopting the fixed price was to protect the successful distributor 
and to protect the product from being demoralized in price 
so that we could continue to make high-grade article. A fixed 
price means many added burdens to the manufacturer, as we 
protect the dealer in his profits without getting any additional 
price from him. At least that is the way it has worked out in 
our case. After adopting the fixed price, we found that it 
was obligatory on our part to take back any goods which had 
become damaged in any way, shopworn, or which a merchant 
said he could not sell at the fixed price." 

In response to questions from the chairman of the com- 
mittee the sad-iron manufacturer and that, after deducting all 

expenses, including advertising, the manufacturer's 

w^If net profit on the asbestos irons averages 5 to 8 

Figures cents per set. He declared that his company has 

already expended several times its capital stock of 
$250,000 in advertising and selling expense. The annual 
output of irons by the Ohio concern was given as between 
300,000 and 500,000, and it was stated that the company has 
paid 6 per cent, cash dividends and 7 or 8 per cent, stock 
dividends, say, an average of 12 to 15 per cent., annually 
since the company was organized. 

Mr. Johnson was especially interesting when he took the 
ground that there are few commodities with which you can 
go to the consumer direct, and that if you withdraw support 
from either the jobber or retailer, or both, you might almost 
as well discontinue manufacturing. While on this topic, he 
pointed out the advantages of "quality goods" and said: 
"Beginning in the seventies with the advent of the depart- 
ment store and catalogue house and ending with the nineties, 

we had, in this country, what might be termed a 
The His- ' price market. ' That is, quality was sacrificed to 
°'^Pnce *^ Pi'ice and the cry of the retailer as well as the jobber 
Market was for something cheap, cheaper, cheapest, and it 

was a hard matter to get a good article, even though 
you were willing to pay for it, as the dealers did not dare to 
carry them for fear they would be called ' high-priced. ' Begin- 
ning in the nineties, there developed what might be called 
a 'quality market,' and this has made rapid strides. In fact, 
the major portion of the consuming public now demands 
quality and does not haggle on price." 



394 ADVERTISING AS A BUSINESS FORCE 

The sad-iron manufacturer dwelt at some length upon the 
experience of his firm with the Fair, of Chicago. At the outset, 
dealings with the Chicago store allowed the store a profit of 
40 per cent, and the manufacturer paid the expense of the 
demonstrator installed at the store. Then the Fair declined 
to purchase any more goods unless they were granted the jobbers' 
prices. The manufacturer offered them 50 per cent., but this 
was not satisfactory, and to bring him to time the Fair adver- 
tised and sold the goods at a cut price. Later a truce was 
effected, but after a year or so the same trouble was precipitated 
and continued until the sad-iron manufacturers sued the Fair 
and won its suits. In conclusion, Mr. Johnson said: "I 
am convinced that the Fair buys many of their goods at less 
than the extreme jobbers' price, as they are in a position to 
demoralize the market on almost any well-known commodity 
unless the manufacturer satisfies them. A profit of 50 per cent, 
on the average commodity does not appeal to the average 
department store. I understand that many of them have a rule 
not to advertise an article which does not pay them 60 per cent, 
or better, unless the advertising is done to attract people to 
their store, when the article will be sold for considerable less 
than cost." 

In marked contrast, naturally, to the views of Mr. Johnson, 
were those of Walter H. Chamberlin, a Chicago attorney, who 
appeared on behalf of the Fair, Siegel-Cooper Co., Rothschild 
Co., the Boston Store and Hillman's — all department stores 
located in Chicago. He was, of course, against price mainte- 
nance and the burden of his plaint was that the actions for 
infringement started by manufacturei"s to protect and enforce 
their resale prices were, as he put it, "fake" suits and that 
there was not enough involved in any particular suit to warrant 
a department store in expending from $5,000 to $15,000 to 
contest the case. His plea was that a manufacturer is entitled 
to only so much protection as a valid contract gives him and not 
to any protection in his retail prices, and on the score of patent 
infringement. This, it may be added, is a view of the situation 
which seems to find favor with some of the more radical members 
of the Patent Committee. . . . 

The concern of the retailers of the coimtry for a continuance 
of the practice of price maintenance has been voiced by several 
witnesses, prominent among the number being John M. Roberts, 
president, and J. P. Archibald, member of the executive board 



PRICE MAINTENANCE 395 

of the Pennsylvania Retail Jewelers' Association. The latter 
brought out the fact that the retailers are partial to the well- 
known, price-protected articles, even though the margin of 
profit be narrower, because of the fact that such articles reduce 
the retailer's advertising expenses. Said he: "We consider 
it a great advantage to handle those goods that are nationally 
advertised. We retail jewelers have to spend money adver- 
tising our goods that are not nationally advertised. We do not 
have to spend money advertising goods like the Big Ben alarm 
clock. I never put it in my local advertising because every- 
body knows it so well." 

Mr. Noyes, president of the Oneida Community, told, in 
the course of his testimony before the Committee, of his conver- 
sation with a groceryman who said: "We have got to get 
15 to 18 per cent, on most of the articles that we handle in 
order to make anything at all, but I would be tickled to death 
to take every one of the standard, established lines — we will 
say Quaker Oats and that class of goods — and do the business 
for 8 per cent, and make more than I can now with a 15 per 
cent, margin on goods I have to talk." 

Having thus presented some of the main features of the 
questions which are intimately allied with price maintenance 
we shall divide our discussion of the subject into four main 
sections : 

1. Some arguments for price maintenance by those who have 
adopted the policy. 

2. Some arguments against price maintenance by those 
who are opposed to it. 

3. Some of the legal aspects of the policy. 

4. Some methods employed in maintaining prices and some 
of the results secured. 

ABGUMENTS FOR PRICE MAINTENANCE 

The Kellogg Toasted Corn Flake Company, of Battle 
Creek, Mich., has already been mentioned in various places as 
an advocate not only of price maintenance but of its corollary, 
the no-quantity price — that is, the principle of maintaining 



396 ADVERTISING AS A BUSINESS FORCE 

one price, without regard to the volume of the purchase. This 
concern through R. O. Eastman, its advertising manager, 
has made pubhc the result of a census of dealers taken with 
a view to ascertaining how many favored the price maintenance 
policy. Mr. Eastman writes of these results as follows : 

*" Ninety-nine and i*^ per cent. " in favor of price protection. 

That's the attitude of the dealers handling Kellogg's Toasted 
Corn Flakes, if the vote which we have taken may be accepted 
as a criterion. 

At the request of Printers' Ink I have just made a count 
of the ballots received on what might be termed a "straw 
vote" taken bj^ this company. The votes referred to were 
in the form of coupons taken from a circular which was placed 
for a time in the cases as they left our factory. We received, 
all told, 1 ,405 votes from every state in the Union with the 
exception of Nevada, ranging from two in Delaware and Alaska 
to 137 in New York and 146 in Michigan. We received 1,397 
favorable votes and only eight against the protected price, 
a little more than one-half of 1 per cent. 

Besides these ballots, we received a great many letters from 
merchants, expressing their views on the subject more or less 
emphatically. Here are a few of the letters taken almost at 
random and representing widely scattered sections of the 
country. 

Thode Bros., of San Francisco, Cal.: "We do not cut 

anything, and we protect prices wherever we can. Your firm 

made a good move when they fought Weinstein. 

9 r^^^ I see them cutting on Royal Baking Powder. It's 

'jlet(nlers time for ihem to wake up and start something in 

the protecting line. We have turned customers 

away because we wouldn't sell an article three for twenty-five 

cents." . . . 

Wright & Weatherly, of Osage, la.: "Replying to your 
circular, we wish to say that we think that the protected price 
is tiie proper thing, inasmuch as there are so many people in 
business who do not even know they are losing while others 
do so to draw business, as they think, but do not seem to have 
sense enough to see that if they cut the price the others will be 

*Printers Ink, March 11, 1912, p. 60. 



PRICE MAINTENANCE 397 

forced to do the same, and they have gained nothing, but have 
spoiled the profit for themselves and every one else. Therefore, 
the merchant seeks to find more attractive profits in some other 
brands which have not been cut. You can count our vote as 
decidedly YES." 

H. H. Hill, of x\llright, 111.: "We wish to say that we are 
strongly in favor of the protected price on everything, as that 
is the only way that the small dealer can survive his price- 
cutting competitor who has the capital to buy in quantity lots 
and get the benefit of the free goods many concerns are offering. 
The reason that we are handling your products is that no one 
in the county is buying them on free deals and cutting the price. 
As soon as some one goes to cutting the price on goods of this 
kind we quit handling it if possible. We only wish we werfe 
as well protected on other staples as we are on Kellogg's Corn 
Flakes." 

J. L. Anderson, of Galena, Kan.: "As to the enclosed 
ballot, will say I have three different articles in my store selling 
under the protected price plan, and have goods of same quality 
not under protected price plans and am selling 33^ per cent, 
more of protected goods than those that are not." 

J. C. Bushey, of Lebanon, Pa.: "Just a word about your 
protected price plan: I would be in favor of such a plan not 
only in Corn Flakes but in other goods, as I think it would put 
the small retailer on the same level with the larger retailer." 

Thomas E. Bawden, of Laurium, Mich.: "Replying to 
your circular, I beg to say I heartily support the Sticker, 
especially on the Kellogg Corn Flake. The woods are full 
of so-called Corn Flakes that may be bought in quantity for 
a punched dime. In my experience the consumer is willing 
to pay the 'price' for the 'quality' and as 99 per cent, of my 
patrons who use Corn Flakes ask for Kellogg's, I am 'sot' 
enough to believe they know what is good and no chatter about 
the price. Keep the quality up and your flake is safe." . . . 

J. M. Holmes, of Kennewick, Wash.: "I want to con- 
gratulate you on the stand you have taken in protecting your 
price on your Corn Flakes. This is the only salvation for the 
small retail dealer. I sell about five cases of your goods every 
month and will push no other as long as j^ou stand by the 
price and a square deal." . . . 

C. M. Underbill, of Lakewood, N. J.: "I think it a wise 
plan to protect the price of an article of such merit as Kellogg's 



398 



ADVERTISING AS A BUSINESS FORCE 



Corn Flakes. I have handled the article for a number of 
years, and take pride in offering it to my trade. I find nothing- 
equal to it among the many imitations. I think it unfair after 
introducing an article of merit to have some price cutter come 
in and cut the price until one feels like setting it aside for some- 
thing else in order to get a living profit. This happened several 
times with good articles, and it is unfair to the manufacturer, to 
the grocer, and to the consumer. We cannot work for nothing, 
and are s^ometimes compelled to do things which would not 
be done if we had the protection which some manufacturers 
give the jobbers." 

The votes we have thus far received were distributed as 
follows : 



STATES YES 

Alabama 8 

Alaska 2 

Arkansas 11 

Arizona 5 

California 52 

Colorado 37 

Connecticut 29 

Delaware 2 

Dist. of Columbia 1 

Florida 14 

Georgia 4 

Idaho 10 

Illinois 82 

Indiana 46 

Iowa 13 

Kansas 16 

Kentucky 6 

Louisiana 5 

Maine 14 

Maryland 14 

Massachusetts 46 

Michigan 146 

Minnesota 29 

Mississippi 11 

Missouri 16 

Montana 10 



STATES YES NO 

Nebraska 7 

Nevada 

New Hampshire 20 

New Jersey 48 

New Mexico 4 

New York 137 1 

North Carolina 3 

North Dakota 13 

Ohio 89 1 

Oklahoma 3 

Oregon 20 

Pennsylvania 134 

Rhode Island 7 

South Carolina 6 1 

South Dakota 17 

Tennessee 5 

Texas 6 

Utah 13 

Vermont 10 

Virginia 15 

Washington 51 

West Virginia 12 

Wisconsin 49 ] 

Wyoming 5 

Scattering 95 



Total 1397 



1405 



Another case taken from the grocery trade is that of the 
coffee house of B. Fischer & Company, of New York, exploiters 
of the Hotel Astor coffee. The advertising manager of this 



PRICE MAINTENANCE 399 

company, Frederick W. Nash, discusses the experience of that 
company in the following terms : 

*Editorial Note. — B. Fischer & Co.'s retail price protection policy has 
grown out of fifty years of experience as importers, manufacturers and packers 
for the grocery trade. In view of the increasing agitation the country over 
to have the next Congress pass a law that shall allow reasonable price main- 
tenance on advertised brands, the data herewith are valuable. 

"The very germ of civilized industry is the idea of well- 
ordered mutual work instead of disordered antagonistc work — 
a helpful and common-sense co-operation rather than a riotous 
and haphazard competition." So writes Former United States 
Senator Albert J. Beveridge, discussing the Sherman law and 
its misapplication to modern business. He also quotes history 
as showing that failures and hard times are unfailing results 
of unintelligent, unrestrained competition of hundreds of 
thousands of little enterprises. 

W. K. Kellogg, of the Kellogg Toasted Corn Flake Company, 
confirms this view from practical experience as a manufacturer 
and distributor of food. He says in Printers' Ink, December 7 
issue: "I know of no better way — indeed, I know of no 
other way — to ensure a living profit to the dealer than to 
protect the price. . . . The grocery business is a great, 
big, loosely organized trade. For every one real business man 
in the trade there are many who do not know their cost of 
doing business. Nine out of ten want to sell at a fair price, 
but when one cuts the price of a well-known article the rest 
feel they must meet the cut and the whole trade on that one 
item is brought to a no-profit level. Leave it to them to work 
out their own salvation, and nine times out of ten they will 
work out their own destruction instead, and while they are 
doing it they also work out the destruction of the article they 
are cutting — that's why the manufacturer must protect 
his goods." 

He might have gone further and said truly also that the 
The working out of such matters, if left to the dealers. 

Results results in deterioration of quality or substitution of 
of Cutting inferior goods to meet purely price competition, with 

Pnces consequent disadvantage to consumers as well as to 
retailers and manufacturers of quality products. 

^Printers Ink, February 1, 1912, p. 56. 



400 ADVERTISING AS A BUSINESS FORCE 

The grocery trade is a typical example of the need for main- 
taining the principle of legitimate price protection, especially 
on advertised and trade-marked merchandise. Here are a fe^ 
facts and figures that are illuminating as to the actual conditions 
among grocers in the United States : 

Number having capital of $1,000 to $3,000 56,000 

Number ha\-ing capital of $3,000 to $5,000 28,000 

Number having capital of over $5,000 16,000 

Total, exclusively grocers (not including stores carrj-ing other lines, 
such as general stores, department stores, etc.) 100,000 

In addition to these 100,000 which constitute the successful 
class, there are more than 100,000 additional listed and classified 
as grocers with less than $1,000 investment or resource. 

The normal cost of doing a grocery business under modern 
conditions (now that the housewife must have everything 
delivered for her on short notice, even to a five-cent box of 
crackers or a penny yeast cake) varies from 15 to 18 per cent, 
of gross sales — 17 per cent, is considered a fair average. The 
grocer's gross profit on all sales averages only 20 per cent, 
rarely more, often less. Hence he can figure on an actual net 
profit of only 3 per cent. 

Let us suppose that the successful 100,000 grocers manage 
to turn over their entire capital monthly on this basis: 

Business with $1,000 capital, $12,000 annual sales, earns $ 360 

Business with $2,000 capital, $24,000 annual sales, earns 720 

Business with $3,000 capital, $36,000 annual sales, earns 1,080 

Business with $5,000 capital, $60,000 annual sales, earns 1,800 

Contrast these returns for investment, risks, long hours 
and hard work required in the grocery trade as compared with 
profits and conditions in other lines of business, and all the 
talk about the grocer's large profits being a chief cause of the 
high cost of living seems pure piffle. One can count on two 
hands' fingers about all the men in the United States who have 
really gotten rich in the retail grocery business in the last 
generation 

But this is not the worst of the grocer's troubles. Consider 
the army of small, unbusinesslike, unsuccessful grocers, who 
come and go, in and out of the business annually. There is 
nearly 20 per cent, change in the personnel of dealers; r. e., 
including those in the business and those who come in 



PRICE MAINTENANCE 401 

and go out within a year. This fearful rate of mortality 
and change keeps the trade in an unsettled, unorganized 
condition, and renders next to impossible the working out by 
retailers themselves of any effective price maintenance reform — 
especially as they are to run afoul of the Sherman law if they 
combine to that end. 

With full realization of these conditions through more than 
half a century's grocery trade experience, B. Fischer & Co. 
stand squarely committed to the principle of legitimate and 
reasonable price protection for the retailer of Hotel Astor Coffee 
and other advertised specialties. 

This policy was adopted in the beginning and has been 

adhered to as a necessary and "reasonable restraint" of retail 

price making, both above and below the standard 

Reasonable considered fair and most advantageous to all con- 

of Prices cerned. Not only is the dealer protected in making 

a legitimate profit on Hotel Astor Coffee, but he is 

protected from asking an excessive, unbusinesslike profit — 

a policy only too common, and one that only increases his 

competition from special tea stores and the premium coffee 

schemes which have been the natural outgrowth of the average 

family grocer's mistaken policy in trying to make up through 

excessive profits on teas and coffees for lost profits on sugar 

and similar no-profit lines. 

B. Fischer & Co. believe in advertising the retail price to 
the consumer, for this reason (and others), and while there are 
the usual trade exceptions in the way of "hide-bound private- 
brand stores," "long-profit, long-credit accounts," etc., that 
object to this method of regulating their profits, our experience 
is that the better class grocery trade in general are in sympathy 
with a policy which provides for a "square deal for everybody." 

When it was necessary recently to advance the price of 

Hotel Astor Coffee the dealer was not left to struggle 

Dealers ^^'i^^ the problem of getting the advanced retail 

Not Left price alone, but B. Fischer & Co. assumed entire 

To Struggle responsibility for making the advance to consumer, 

Ahne ^^^ explained the reasons fully in a series of 140-line 
newspaper advertisements. 

The writer concurs fully with Mr. Kellogg in his view that 
"when the principle of price protection is brought into court 
by a litigant having clean skirts, engaged in a legitimate business 
and maintaining a schedule of prices solely to ensure a safe 



402 ADVERTISING AS A BUSINESS FORCE 

economic plan of distribution, it will be upheld and vin- 
dicated." 

It is alleged that the purpose of the Sherman law is to correct 
certain abuses growing out of associated effort, but not prevalent 
in competitive effort. There seems to be general agreement 
among those who have studied the subject and are in positions 
which enable them to speak with authority that these abuses 
are chiefly: 

1. Over-capitalization, with its watered stock influences. 

2. Arbitrary price raising, and lowering especially to stifle 
legitimate competition. 

If this is the correct view, it certainly would require a good 
deal of stretching to apply the Sherman law to the grocery 
trade in connection with a co-operative price maintenance 
policy operated on a fair basis for consumer, retailer, and manu- 
facturer — especially when there is no monopoly of business 
on the goods protected. 

ARGUMENTS AGAINST PRICE MAINTENANCE 

Duke C. Bowers, of Memphis, Tenn., is among the earnest 
and outspoken opponents of price maintenance. Mr. Bow- 
ers has established a chain of grocery stores in Memphis in 
which he has attempted to work out a policy of uniform rate 
of profit on all lines of goods which he handles. This he does 
without regard to the effect which this policy might have 
upon the prices to the consumer of goods on which the manufac- 
turers attempt to maintain the price. Mr. Bowers takes the 
ground that, as far as possible, sugar, tea and every other line 
handled in his store ought to bear an equal share of the cost 
of doing business. This makes him necessarily a very active 
opponent of price maintenance plans. He expresses his views 
in the following terms: 

*I take it for granted that Printers^ Ink readers are posted 
as to the growing tendency of manufacturers to fix, not only the 
jobbing, but the retail price as well, on articles of their 
manufacture. Hence, I shall try to confine my talk 



*Printers' Ink, January 5, 1911, p. 42. 



PRICE MAINTENANCE 403 

to the, what I beheve to be, unfair, unjust and selfish price 
maintenance plan. 

As I see it, it is selfish because the retailer wants it because 
it keeps his competitor from underselling him and the manufac- 
turer adopts it because it is a fine bait to get the retailer to push 
his goods. 

As I see it, it is unfair for the reason that it prevents a mer- 
chant from giving his customers advantage of his money- 
saving system. It is a plan to put more money in the coffers 
of the merchant, hence, squeezing more money out of the 
customers. A man's customers are his best friends, hence, 
when he joins in the price maintenance plan and agrees to not 
sell to his customers for less than a certain fixed price, then, 
to my mind, he makes a mistake. 

A merchant's ideal should be, always "looking out for the 
interest of his customers." You think such an idea silly .f* 

What would be your opinion of the physician who thought 
more of the fee that he would get out of you for an operation 
than he would of performing the operation with the hope of 
benefiting you.f^ 

What would be your opinion of the minister of the gospel, 
who was preaching for the money there was in it instead of 
the saving of souls? 

Isn't it reasonable to suppose that the merchant owes a duty 
to his customers, just as much as does a physician to his patients, 
or the preacher to his flock.'' 

If you will agree with me that he does, then how can you 
disagree with me when I say that when a merchant joins any 
kind of a combination that prevents him from guarding the 
interests of his customers, he is most likely thinking of his own 
selfish greed, thereby letting Avarice instead of Duty be his 
master. 

The manufacturer may feel that the merchant is his customer, 
therefore he should look out for his interest. In one sense 
of the word, the manufacturer is right, yet, he should stop 
to consider that the user of his product is the one that is his 
best friend, hence he should never lose sight of his (the user's) 
interest, and when he (the manufacturer) dictates to a retailer 
that he shall not sell his product to the consumer for less than 
a certain price, he, the manufacturer, has undoubtedly in 
this instance lost sight of the interest of the users of his 
product. . . . 



404 ADVERTISING AS A BUSINESS FORCE 

Mr. Bowers, in this discussion, does not cover more than 
the single argument against price maintenance — the cost 
to the consumer. But that is the one argument which still 
resists the logic and the skill of the fixed-price advocates. 
Many wholesalers have given their approval to the price- 
maintenance principle, and we have already seen how retailers 
regard the plan as it is operated by the Kellogg Company. 
Many consumers, too, may be persuaded that their interests 
might be served better in the long run if everybody in the selling 
system were satisfied with fixed terms and profits for buying 
and selling. But when a 25-cent tooth powder of guaranteed 
quality can be bought for 19 cents, or when a 15-cent breakfast 
food can be bought for 10 cents, the consumer is prone to forget 
his logic and buy where the prices are low. He is very apt to 
feel that if the price cutter is so clever that he can profitably 
deliver the goods at a lower price, or so stupid that he is willing 
to sell them at a loss, the result to him, as a consumer, is much 
the same. And thoughtful, indeed, is the consumer who turns 
his back on these savings, taxing himself, by that much, to 
save his less able, or less foolish, local storekeeper from anni- 
hilation. 

Whether this position of the consumer be sound or not, it 
is surprisingly general, and it has split more than one very stanch 
price-maintenance craft. 

Thus far, practically all of the illustrations which we have 
employed in the price-maintenance field have been confined 
to the grocery business, but the same problems are met in 
virtually every line of trade going out into consumption through 
the retailer. The attitude of large department stores finds 
typical illustration in the views of R. H. Macy Company, of 
New York : 

*0f all the rebels among retailers who have seceded from 
the manufacturer's policy of price protection, R. H. Macy & 
Co., New York, are, perhaps, the most rebellious. Ask any 

* Printers' Ink, August 4, 1910, p. 8. 



PRICE MAINTENANCE 405 

manufacturer who has been trying to maintain his prices what 

success he has met with, and, in a goodly number of cases, if 

he has experienced difficulty in any direction, it has 

been with this well-known department store. 

^'stares Scores of manufacturers have refused to sell it any 

View of more of their goods. But that has only proved the 

Price beginning of their troubles. As likely as not, the 

Main- j^Qygg Qf Macy has apparently managed to get in- 
directly, by some devious and inexplicable manner, 
the goods which have been refused it directly. Complicated 
business ramifications and connections have made this possible. 
The manufacturers have been quite in the dark as to how it 
has been managed. Only those of them whose products have 
been of such a nature that they could be serially numbered 
(a big expense at best) or who have sold their goods direct, 
and not through the jobbers, have had any certain means 
of insuring their position, as a rule. 

There was a time, when the Macy store was located farther 
downtown, when it was much smaller and much less preten- 
tious. Whether it has been due to the removal uptown to 
Thirty-fourth Street and into a new and large building, or to 
the proverbial Macy attitude toward prices, or to something 
else, the fact remains that R. H. Macy & Co. has prospered 
rapidly. 

The concern's monumental instance of opposition to the 
wishes of the producers in the matter of prices has been in 
the book department. Admittedly, this concern plans to 
carry the matter of book prices to a final conclusion in and out 
of the courts. When it is once disposed of, the officials of the 
store propose to concentrate their efforts along other lines, 
where the manufacturers have also been particularly insistent 
as to price standards. In drug lines, now, Macy is a persistent 
and bold opponent of price maintenance. 

In order to give its readers an authoritative idea of the point 
of view of a retail concern which is such a leading dyed-in-the- 
wool opponent of price maintenance. Printers' Ink has obtained 
some pertinent statements from one of the men who formulate 
the Macy policies, who has good-naturedly explained the 
price-maintenance idea as it looks from the Macy perspective, 
the other side of the fence. 

"In the first place," he said, "let me explain that we do 
not look upon ourselves as price cutters. We are not that, we 



406 ADVERTISING AS A BUSINESS FORCE 

believe. To our point of view, we are rather opponents of 
price boosting. Take our book prices, for example, which are 
so often referred to. We were selling current fiction at 98 cents 
regularly before the book people made a combine and tried 
to force us to boost our prices to $1.08, the price other dealers 
regularly ask for new copyright fiction. This we have refused 
to do. We have gone to every possible extreme to get books, 
when they have been refused us directly, which, we believe, 
we have been perfectly justified in doing. We have obtained 
our books and have sold them as we have seen fit. That is 
all there is to it. 

"What the book people have tried to do is only an example 
of the situation as regards practically all the self-styled 'price- 
maintainers. ' These manufacturers trade-mark their goods; 
then they advertise the trade-mark and finally they attempt 
to boost the prices, when the public has learned to want what 
they make, asking the retailer to combine with them in their 
schemes to squeeze the purses. 

"There is one thing which should be especially kept in mind 
in connection with the Macy establishment," he continued. 
"It is the fact that we sell here on a cash basis strictly. In 
every instance we have the buyer's money before the buyer 
gets our goods. This means that we have no charge accounts, 
and that we are unable to offer to the public those facilities 
which go hand-in-hand with the credit privilege. Without 
these, we must offer some substitute inducement to bring the 
public to us. Otherwise the public would not come. That 
'something' must be even more attractive than the credit 
privilege. Years ago we decided that it should be price 
inducements. 

"It is our business working-principle to sell everything 
lower than it can be bought for elsewhere in any other compet- 
ing retail establishment. We have a corps of workers, I may 
add, who make it their constant endeavor to go into our com- 
petitor's stores and learn what prices are being asked. We 
won't sign price-maintenance agreements. And, as far as 
that goes, I may say that, looking at the matter broadly, 
we much prefer not to sell an article at all if we cannot sell it at 
a lower price than others. It was on this basis, for example, 
that we sold Cuticura soap at a big loss for a long period of time. 

"And there is another important point which should be kept 
in mind in connection with Macy's. We are a one-price house. 



PRICE MAINTENANCE 407 

By that we mean that we sell all-comers at the same price. 
You may think that that is only to be expected, that the day 
of the store of many prices has long since passed. But it has 
not. The fact is, and our investigations have gone to prove 
it in any number of cases, that most of our competitors, whose 
reputation for maintaining prices is generally established more 
illustrious than ours, make a practice of selling price-restricted 
articles at a considerable discount to clergymen, dressmakers 
and a host of others who make up a number of special classes. 
Claims to membership in these privileged classes need not 
be proven. 

The Macy authority was asked if he did not consider that 
a progressive retailer owed something to the progressive manu- 
facturer in the matter of protecting prices. 

"Let me answer that question," he replied, "by asking a 

question in return. Do your readers who are enthusiastic 

believers in price maintenance feel that they are 

nhr r under any obligation, moral or legal, to Macy's after 

Ceases they have bought something here and have paid for 
it? Wouldn't they feel that we were presuming upon 
our prerogatives if we attempted to instruct them as to how 
they should use, or on what basis they should resell, whatever 
they have bought of us.'* There is really nothing different, 
from our point of view, in our relation with, and our obligations 
to, the manufacturers. 

"The manufacturer gets from us the prices they ask of us, 
and we certainly consider our obligations to them ended when 
we make financial settlement with them." 

The Macy head was asked whether, inasmuch as he claims 
to be a friend of the consumer, he considers it for the best 
interest of the consumer for prices to be maintained; whether, 
if prices are not maintained by Macy's and other big retailers, 
the ultimate result is not that thousands of small dealers 
refuse to handle the goods in question at all, because they 
cannot sell them in competition, all of which means smaller 
aggregate sales for the manufacturers, necessitating that 
they, in turn, either cheapen quality or go out of business, 
a disastrous outcome from an economic standpoint, in either 
event. 

"But is this the case?" he asked in way of reply. "I have 
one proprietary article in mind — I'll tell you its name, 
Listerine — which has not been price-maintained and which 



408 AD\TERTISING AS A BUSINESS FORCE 

has been cut and cut by the retail dealers. Yet I have heard 
that the sales of Listerine have been going up and up, all the 
time the cutting has continued. These manufacturers have 
always got the price they have asked. They have had no 
reason for complaint. It hasn't been poor economics. 

"But, while we are on the general subject of quality in 

relation to price maintenance," he continued, "isn't quality 

really a relative matter at best.? I can grant you, 

^V^^ perhaps, that advertised goods are high in quality, 

anceand ^'^^n that they could not be successfully advertised 

Quality if they were not so. But we believe that advertised 
goods are not, as a rule, better in quality than it 
is imperative they should be in order to make them a paying 
proposition. 

"It has been our experience that most manufacturers who 
advertise attempt, in one way or another, to boost prices 
higher than they normally should, in order to meet the cost 
of their advertising. Because of a certain false pride, we buy 
a lady a box of 80-cent candy of one of two or three widely 
advertised brands. Yet I am positive that there is candy 
selling at 59 cents which is the equal of any 80-cent variety 
ever made. The difference in price goes toward paying for 
the advertising." 

The Macy head was asked if there were not instances of 
advertised goods which are sold at prices as low or lower than 
those asked for any unadvertised goods. x\ certain widely 
advertised cracker was mentioned as an instance which, without 
a doubt, i.s well worth the five cents asked for it. It was 
pointed out that Macy's frequently sold this cracker and other 
like goods at less than the advertised prices. He was asked 
for an explanation of such merchandising. 

"I cannot say with certainty as regards the goods referred 
to," was the reply. "But I do knoAv of a number of instances 
where manufacturers of price-advertised goods have come to us 
and requested that we sell their goods at whatever price we wish 
if only we will give publicity to the fact that we are handling 
them. This is particularly often the case with manufacturers 
of new products for which they are striving to get a first market. 
Manufacturers appreciate that when a store such as Macy's 
advertises their articles it means an immense amount of free 
and authoritative publicity for them. ^Yhen the ])ublic comes 
to learn the mere fact that a store like ours is carrying certain 



PRICE MAINTENANCE 409 

new products, that fact helps the sale of those products every- 
where to a material degree. 

"And, in general," he concluded, "we believe that the 
tendency of the times, or rather the tendency of the courts 
which reflect the tendencies of the times, is away from price- 
maintenance and toward free, unrestricted merchandising and 
retailing. 

LEGAL ASPECTS OF PRICE-MAINTENANCE 

The advocates of price-maintenance have been obliged to 
revise some of their accepted methods as a result of the deci- 
sion rendered by the Supreme Court of the United 

ji^illg States April 3, 1911, in the case of Dr. Miles 
^s. Medical Coinpanyvs.John D. Park & Sons Company, 
Decision ^f Cincinnati, Ohio. The Miles company are makers 
of proprietary medicines prepared under secret for- 
mulas but sold in packages identified by a trade-mark. 
They alleged that their trade had been interfered with and 
their profits reduced by price cutting by the Park company. 

The Miles company method of sale was an ingenious one, 
the sale to the wholesale trade being conducted on an agency 
basis. The goods by the terms of the agency contract did 
not belong to the wholesaler and were sent to him only on 
consignment. Title did not pass from the manufacturer until 
the goods were sold to the retailer. This was believed to 
make it possible for the manufacturer to dictate the price at 
which the goods should be consigned to the wholesaler and 
also the price at which he was to convey them to the retailer. 
The wholesale contract further stipulated that the goods were 
to be released by the wholesaler only to designated retail 
agents of the manufacturer. 

There was also a retail agency contract which similarly tied 
up the retailer and stipulated wholesale price, quantity dis- 
counts and retail price, and provided for penalties for violations. 
The Miles company was selling its goods under the terms of 
these contracts through 400 jobbers and 25,000 retailers. 



410 ADVERTISING AS A BUSINESS FORCE 

When the Park company cut the retail price on some of 
the goods in violation of the term of the contract, the Miles 
company asked for an injunction restraining them from at- 
tempting to induce any of the wholesale or retail agencies, 
under contract, to violate the terms of their contract agreement. 
Justice Hughes prepared the opinion of the Court. Justice 
Holmes dissented, and Justice Lurton did not sit in the 
case. Otherwise the Court agreed with Justice Hughes. The 
decision first analyzed the two contracts and takes the ground 
that the "agency" terms in them were only a subterfuge, 
and that they were in restraint of trade. It further declared 
that even the secret processes of the company did not give it 
a right to fix the price. The decision then sums up the case 
as follows: 

The present case is not analogous to that of a sale of good 
will, or of an interest in a business, or of the grant of a right 

Part of ^^ ^^^ ^ process of manufacture. The complainant 
the has not parted with any interest in its business or 

Supreme instrumentalities of production. It has conferred no 
Court's rigJit by virtue of which purchasers of its products 

Veciston j^g^y compete with it. It retains complete control 
over the business in which it is engaged, manufacturing what 
it pleases and fixing such prices for its own sales as it may 
desire. Nor are we dealing with a single transaction, conceiv- 
ably unrelated to the public interest. The agreements are de- 
signed to maintain prices, after the complainant has parted 
with the title to the articles, and to prevent competition among 
those who trade in them. 

The bill asserts the importance of a standard retail price 
and alleges generally that confusion and damage have resulted 
from the sales at less than the prices fixed. But the advantage 
of established retail prices primarily concerns the dealers. 
The enlarged profits which would result from adherence to 
the established rates would go to them and not to the com- 
plainant. It is through the inability of the favored dealers 
to realize these profits, on account of the described competition, 
that the complainant works out its alleged injury. If there 
be any advantage to a manufacturer in the maintenance 
of fixed retail prices, the question remains whether it is one 



PRICE MAINTENANCE 411 

which he is entitled to secure by agreements restricting the 
freedom of trade on the part of dealers who own what they 
sell. As to this, the complainant can fare no better with its 
plan of identical contracts than could the dealers them- 
selves if they formed a combination and endeavored to 
establish the same restrictions, and thus to achieve the 
same result, by agreement with each other. If the immediate 
advantage they would thus obtain would not be sufficient 
to sustain such a direct agreement, the asserted ulterior benefit 
to the complainant cannot be regarded as sufficient to support 
its system. 

But agreements or combinations between dealers, having 
for their sole purpose the destruction of competition and the 
fixing of prices, are injurious to the public interest and void. 
They are not saved by the advantages which the participants 
expect to derive from the enhanced price to the consumer. 
People V. Sheldon, 139 N. Y., 251; Judd v. Harrington, 
139 N. Y. 105; People v. Milk Exchange, 145 N. Y. 267; 
United States v. Addyston Pipe & Steel Co., 85 Fed. 271; on 
app. 175 U. S. 211; Montague & Co. v. Lowry, 193 U. 
S. 38: Chapin v. Broivn, 83 Iowa, 156; Craft v. McConoughy, 
79 111. 346; W. H. Hill Co. v. Gray & Worcester, 127 N. W. Rep. 
(Mich.) 803. 

The complainant's plan falls within the principle which 
condemns contracts of this class. It, in effect, creates a com- 
bination for the prohibited purposes. No distinction can 
properly be made by reason of the particular character of the 
commodity in question. It is not entitled to special privilege 
or immunity. It is an article of commerce and the rules 
concerning the freedom of trade must be held to apply to it. 
Nor does the fact that the margin of freedom is reduced by the 
control of production make the protection of what remains, 
in such a case, a negligible matter. And where commodities 
have passed into the channels of trade and are owned by 
dealers, the validity of agreements to prevent competition 
and to maintain prices is not to be determined by the circum- 
stance whether they were produced by several manufacturers 
or by one, or whether they were previously owned by one 
or by many. The complainant having sold its product at 
prices satisfactory to itself, the public is entitled to whatever 
advantage may be derived from competition in the subsequent 
traffic. 



412 ADVERTISING AS A BUSINESS FORCE 

On March 11, 1912, the Supreme Court of the United States 

handed down its decision in the case of Sydney Henry vs. A. B. 

Dick Co., which served to further estabUsh the ac- 

P rice Main- . j -j p • . n* p i r 

tenance on cepted ideas oi price-controlhng power oi makers ot 

Patented patented articles. This decision, in brief, took the 
ground that the monopoly power granted by the 
patent gave the patentee the right to enforce restrictions 
covering the article subsequent to sale. This decision has 
led the makers of patented articles to feel much freer to 
enforce price-restrictions than they were between the time of 
the Miles vs. Park decision and the date of this new de- 
cision — which is commonly referred to as the Dick case, 
or the Rotary Mimeograph case. This decision was reached by 
a 4 to 3 vote, there being one vacancy on the Bench, and 
Justice Day not participating in the case on account of illness. 
An ineffectual effort was made to have the case given a re- 
hearing, and the House Committee on Patents has submitted 
to Congress, (largely as a result of this case) the Oldfield Bill 
defining the limits of control over an article after it is sold — 
even if it is sold under a patent monopoly. This bill is against 
the trend of previous decisions; if it is passed the price- 
controlling power of the seller of a patented article wall not 
long enjoy its present degree of freedom from legal restric- 
tion.* 

The Miles vs. Park decision necessarily upset the selling 
arrangements of many manufacturers, and the question as to 
how far a manufacturer of unpatented articles can go in the 
matter of maintaining his price and still keep within the law 
is by no means settled even yet. An illustration of what took 
place in many concerns is found in the following letter which 
was sent out by the Eastman Kodak Company to its retailers, 
and the announcement which followed it: 



*The '^ Bath-Tub Case" decision rendered November 18, 1912, denies the 
right to restrict the terms of sale of unpatented articles produced on patented 
machinery. 



PRICE MAINTENANCE 413 

Eastman Kodak Company, 
Rochester, N. Y., Nov. 15, 1911. 
* To the Trade 

New Terms of Sale 

Until recently it has been our belief that any manufacturer 
had the right to control the merchandising of his goods con- 
taining secret compositions, as well as his patented 
The goods. It was also our opinion, and for that matter 

Kodak" ^^ ^^ ^^^^^ ^^^ opinion, that such control works to the 

Policy ultimate advantage of all concerned ■ — consumer, 
dealer, and manufacturer — because it means that 
the manufacturer puts his whole endeavor into making his 
goods better in order to meet competition instead of attempting 
to meet it by cutting the cost, generally at the expense of 
quality. 

However, the Supreme Court of the United States has 
recently decided that a manufacturer cannot enforce a contract 
by which he attempts to control the retail selling price of his 
goods made by secret processes, but not patented. 

Desiring to conform to the spirit as well as the letter of 
the law, we shall from this date remove all restrictions which 
have heretofore prevailed in connection with non-jjatented 
goods. 

We are sending herewith our new Terms of Sale, showing 
the changes that have been made. 

With the restrictions removed from our unpatented goods 
we fear that there will be a tendency in some quarters to reduce, 
by price cutting, the dealers' profits. 

Desiring to do what we can to offset the loss from such price 
cutting, and thus help the dealer to a reasonable profit, we 
have decided to increase the discount of Kodak film from 
25 per cent, to S5 and 10 per cent. 

Our business has been built up on a quality basis. Making 
goods just as well as we know how has become a fixed habit. 
We shall continue to serve our customers with the best photo- 
graphic goods that are made, shall continue to help our con- 
sumer customers with our schools and our demonstrating 
force, and our dealer customers with even bigger and broader 
advertising than we have done before. 



*Printers' Ink, November 23, 1911, p. M. 



414 ADVERTISING AS A BUSINESS FORCE 

Our change in sales policy is simply made in order that we 
may conform with the recent decision of the Supreme Court 
of the United States. 

We consider this an opportune time to obtain an expression 
from the trade as to the desirability, from its standpoint, of 
our continuing our price-restriction and exclusive sale policy 
so far as patented goods are concerned. We are, therefore, 
enclosing herewith a post-card which we ask that you use 
in recording your view of the matter. If, as a result of the 
vote of the trade, we do not find a strong sentiment in favor 
of a maintenance of these restrictions on patented goods, 
we shall remove them without delay. 

We ask the favor of a prompt reply. 

The Eastman company's Trade Circular for January, 1912, 
contained the following announcement of the results of this 
appeal to its dealers: 

* Terms Upheld 

DEALERS PRACTICALLY UNANIMOUS FOR OUR PRICE MAINTENANCE AND EXCLU- 
SIVE SALE POLICY 

There is to be no change in our sales policy as to patented 
goods. 

Our dealers, by their recent vote, have gone on record as 
almost unanimously m favor of a continuation of our sales 
policy. Recent decisions of the United States courts have 
confirmed a number of similar decisions made during the past 
ten years, upholding the right of a manufacturer to control the 
resale price on patented goods. 

With our dealers strongly in favor of our policy, with recent 
decisions upholding the legality of the price maintenance policy 
on patented goods, and with our own belief that such policy is 
fairest for all concerned — consumer, dealer, and manufac- 
turer — the course to pursue is plain : Our patented goods are 
to be handled only upon the conditions given in our Terms of 
Sale, dated November 15, 1911. 

We have been confident all along that the general attitude 
of the trade was favorable to our policy. Had we not believed 
ourselves to be acting in harmony with our dealers, our policy 
would have been discontinued long ago, but even so we were 

*Printers' Ink, January 4, 1912, p. 55. 



PRICE MAINTENANCE 415 

gratified at the almost unanimous support received in the recent 
referendum. 

Up to date 90f per cent, of our dealers have voted, and of 
the votes received, over 98 per cent, are in favor of a continuation 
of our price restriction and exclusive sale policy. 

METHODS OF MAINTAINING PRICE 

All plans for price maintenance in the case of unpatented 
articles are more or less affected by the Miles vs. Park decision. 
Many are still engaged in readjusting themselves to the decision. 
The various bonus plans which provided for an extra discount 
to be given to those who could show that they had maintained 
prices on a given lot of goods were most common. Then there 
was the "Freeman" plan which did legally and actually what 
the Miles plan did nominally — put out the goods on consign- 
ment. These and various other methods attempted to secure 
legal sanction to the idea of control over the price of the goods 
as long as they were in process of distribution. 

Throughout the rearrangement of price maintenance plans 
which has followed the Miles vs. Park decision there has run 
one general principle, and that is, to substitute for any attempt 
at legal restraint, an appeal to the sense of honor and personal 
interest in the various features of the selling system. This 
substitutes for the legal restrictions of the contracts the moral 
restrictions based on the personal interests of the distributor. 
This seems to be the only feasible solution of the difficulty 
under the present legal conditions in the United States. If any 
law should be passed more clearly defining the limits of price 
maintenance, and the rights of the producer and seller to place 
restrictions on the handling of his goods, of course the situation 
would be modified; but as it now stands about the only feas- 
ible price maintenance system is one which substitutes for 
legal restraint some effective appeal to the distributor's self- 
interest and his moral obligation to protect those who are at- 
tempting to protect him. 



410 ADVERTISING AS A BUSINESS FORCE 

A suggestive case showing how this was done by one manufac- 
turer even before the Miles vs. Park decision is told by Frank 
H. Holman: 

*A white-haired, grizzled veteran of business not long ago 
smiled philosophically at a square-jawed young manufacturer 
who was exhibiting with great satisfaction a bunch of contracts 
for price maintenance with dealers and jobbers. "Your 
contracts," said the old man, with an air of wisdom, "aren't 
worth the paper they're written on." 

The young manufacturer snorted dissent. 

"Every honest man whose name you've got signed to those 
contracts," continued the old man unabashed, "would maintain 
prices if he promised to do so, contract or no contract; while 
the crooks and the wishy-washies will break your prices, con- 
tract or no contract. Personal honor is a stronger force than 
imposing contracts, legal seals, and foxy clauses. There has 
never yet been written a contract that couldn't be broken 
by legal quibble and dishonorable intent. The law is not 
as omnipotent as you think — and personal honor is a practical 
business factor that has as yet to get its full share of credit." 

And then that philosopher-manufacturer quietly pulled 
out some card index drawers which were simply overflowing 
with cards containing the names of many thousands of retailers 
throughout this country, many of them the same as had signed 
price-maintenance contracts with the young manufacturer. 

"With every one of these dealers," said the elder manufac- 
turer, "I have a gentleman's understanding that they will 
not cut prices, and by far the greater part of them stand by 
their word — I've tested them for years. I've never asked 
them to sign their name to a thing." 

This is no tale from Arcadia — the firm in question is world- 
renowned and does a tremendous annual volume of business 
in a wide variety of lines of goods. One of these is 
pFd soap — a li^ie ill which price cutting is usually especi- 
of Honor al^y acute; yet so effectual is the system that the 
company's Eastern manager states that in the course 
of years of experience he has never met with a single failure 
to finally line up the dealers upon a strict price-maintenance 
policy based solely upon spoken pledges. 

*Printers' Ink, June 16, 1910, p. 50. 



PRICE MAINTENANCE 417 

The men who would admit that they are wilfully dishonest 
or that their spoken word is not to be trusted are few and 
far between, if really they are ever to be met with among 
prospering business men. In that fact lies the secret of the 
success of the policy of this soap house. When one of the 
latter's salesmen closes with a dealer for the initial order, the 
interview invariably ends with the salesman explaining that it 
is the established policy of his house to insist upon strict price 
maintenance and asking the dealer point-blank if he pledges, 
upon his honor, not to cut prices. 

Sometimes, indeed very often, such a dealer will haughtily 
answer that he is not a "price cutter" and "never has cut 
prices." But such an answer is not accepted as final. Every 
salesman is explicitly instructed to insist upon a firm "Yes-or- 
No" answer to his question. If it is "Yes," all right; if it is 
"No," the salesman's line-o'-talk runs something like this: 
"Well, Mr. Dealer, I am sorry you cannot see it as we do, 
and realize that it is to your own advantage 7iot to cut prices. 
But, if you persist in your refusal, I am going to ask you not 
to order any of our goods. In that event, we don't want your 
order, and really you don't want our goods, for, if you began 
cutting, all your competitors would have to do the same thing, 
and there would be no end to it. You are selling enough soap, 
as it is, upon which you are not meeting selling expenses or are 
even losing money." 

It is to be noted that goods are not directb/ refused the man. 
The proposition is thus never taken off the personal basis, 
it being up to the personal integrity of the dealer to do The 
Square Thing. And it may overjoy the optimist and the 
believer in the sense of integrity of average humanity to learn 
that, in the case of this soap house, it is said that not one dealer 
in the course of years of experience has failed to come to the 
chalk-mark when the matter has been put to him on this 
personal basis. 

This is not saying that there have not been violations, how- 
ever, and instances of price cutting. Such instances have been 
easily detected, as a rule; and have even been antici- 
Stronger p^ted. The reputation of a dealer who is known as 

Contract a price cutter Usually goes before him. His contem- 
poraries will give him away. "x\re you selling goods 
to Jones?" is the question asked by Price-cutter Jones's com- 
petitor. "Then we don't want any, because there can't be 



418 ADVERTISING AS A BUSINESS FORCE 

any question what he will do." Such an argument is met 
with the proposition that, if the competitor will telegraph, 
charges reversed, to the soap house the first time Jones is 
caught cutting prices, and agree not to cut in the interim himself, 
the soap house will hustle a salesman to the spot by the very 
next train to bring Jones to terms. Being a liberal proposal, 
the suggestion is usually accepted, and thereupon the detective 
work begins and continues automatically. 

^Vhen a specific instance of price cutting, contrary to the 
spoken-word agreement, is shown, the first possible moment 
for a personal interview is seized. In many cases the man 
detected in the act of cutting prices is found in a rather pug- 
nacious mood at the time of such an interview. In not a small 
percentage of cases he will stoutly deny having ever agreed 
to maintain prices anyway. He is then never allowed to 
believe that his bluff will pass for an instant. "I can see how 
it may be possible, Mr. Dealer," says the salesman, "that 
you may really believe you never made an agreement not to 
cut prices, but I am absolutely positive that you did give your 
word in the matter — I have not the least shadow of a doubt." 
Not having been called a liar in so many words, the dealer 
will then usually come down from his "high-horse," it is found, 
and meekly admit that "the matter may have slipped his 
mind." 

Then the whole proposition is approached anew, and a 
second spoken pledge, as between two gentlemen, is asked. 
In case it is refused, which is not often, a little "heavy tradegy " 
is brought to bear — even a cuss word or two and a show of 
valor on the part of the salesman. "Oh, well," says the latter, 
"if that is the kind of a business man you are, sir, and if that is 
all your word is worth, why, all right. But we took you for 
a gentleman." It is the Bullet that Hits the Invulnerable 
Spot. Even the grimmest dealer has a sort of commercial 
Tendon of Achilles where he is sensitive. It is self-respect, 
his pride in his personal reputation for honesty and for being 
a man of his word and an honorable man among men. Sneer 
as the pessimist may at this manner of approach, and this way 
of doing business, yet the fact remains, and it is testified to by 
the commercial philosopher referred to, that this appeal has 
never yet failed to reach its mark. And every new success 
naturally makes the succeeding one the easier. 

In some instances a slightly different angle of approach is 



PRICE MAINTENANCE 419 

taken in case of a point-blank refusal to maintain price. This 
manager tells the story of how he lately went to PittsjSeld, 
Mass., to see a recreant dealer, and sat in his office, in company 
with one of his under-salesmen, during business hours, from 
11 o'clock one morning until the next noon in a successful effort 
to bring the man to terms. It did the trick. "Sometimes it 
is better to besiege the enemy and starve them into submission," 
he says with a smile of reminiscence, "than it is to attempt 
to attack them directly and blow them to smithereens. That 
fellow agreed to get rid of us. I'd have camped out there a 
month otherwise." 

This same personal appeal to a dealer's sense of right actions 
has been extensively used by this same soap house along a little 
different line in the matter of sampling, too. One of its recent 
big moves was a monster appeal through the mails to the 
consumer whose names were provided by the dealers. Along 
with the letter to them went a coupon redeemable at their 
dealer's store for a regulation-sized cake of soap, the dealer 
having been provided in advance with the latter in the necessary 
quantities. It was cheaper to provide a regulation-sized cake 
than to make up a special smaller one. As is always the case, 
the great temptation was for the dealer to steal these sample- 
cakes, assert that he had not received them from the manufac- 
turer when coupon-holders came, and add them to his regular 
stock of salable soap. 

"But a little careful argument on our part," says the 
manager, "and a little more manipulation of the Appeal- 
Personal, sufficed to offset this dealer's temptation. 
The Effects gy personal interviews and by mail we explained 
AvveajT ^^^ ^^ fully appreciated that the dealer in question 
'was personally above any such practices,' even if 
it were not for the fact that it was for his best interests in the 
end that the soap should be given out as originally intended, 
as samples. We explained that for him not to give out the 
soap as samples would mean but to curtail the growth of his 
ultimate sales just so much in proportion and to miss the 
Golden Opportunity. And the appeal struck home and, 
as far as I know, the sample-cakes were used as originally 
intended in every case." 

In this, too, too legal age when lawyers in grim battalions 
and safes loaded with parchments bearing doubly witnessed 
signatures are so frequently relied upon to push through price 



420 ADVERTISING AS A BUSINESS FORCE 

protection and other sales policies, it seems as if the harking 
back to the fundamental, personal, and moral appeal is both 
better business and more agreeable and optimistic. It is cer- 
tainly true that a better feeling must exist between a retailer 
and a manufacturer whose relations are put on the plane 
of pure loyalty and honor than between the manufacturer 
who hand cuffs dealers with steel chains of legal documents. 

Long ago, in pedagogy, it has been established that you 
build morality cjuicker lay putting questions up to the per- 
sonal honor of pupils than by any grim systems of punish- 
ment and rules. Evidently business can make use of the same 
principle. 

The final word which will decide whether price maintenance 
is to continue as a trade policy or whether it must be aban- 
The doned will, in the long run, come from the con- 
Consumer gumer. The maker of breakfast foods may convince 
Final the wholesaler and the retailer that maintained 
Decision prices are good business, but as long as the con- 
sumer feels no effective moral obligation in the matter, 
and is ready to buy his goods where he can secure them at 
the lowext price, any price- maintenance plan is bound to have 
elements of serious weakness. Louis Kaminsky, president 
of the Make-Man Tablet Company, describes his experience 
in attempting to influence the consumer in this matter in 
the following terms: 

*Our direct appeal to the public to assist us in maintaining 
our fixed selling price on Make-Man Tablets will, we believe 
meet with their hearty approval. The congratulatory ex- 
pressions which have reached us from the trade convince 
us that they are in perfect accord with us on this point. These 
expressions show to our satisfaction that we are on the right 
track, and strengthen our determination to continue our policy 
of strict price protection. If all manufacturers who have 
a fixed price on their products should follow the same course 
of reasoning in their advertisements, and show that the price 
fixed by them on their goods affords the retailer only fair 

*Pritderii'' Ink, .January 3, 1911, p. 40. 



PRICE MAINTENANCE 421 

living profits, it would undoubtedly result in obtaining 
more readily full price protection on all articles sold by drug- 
gists. 

It must not be overlooked that nearly all users of proprietary 
medicines belong to that class to whom protection is constantly 
preached. As members of labor organizations they seek 
to protect the price of labor, and they are taught that it is 
both unwise and wrong to patronize the dealer who carries 
and sells unprotected products in which labor enters to any 
extent. A direct appeal to them cannot fail of results, and 
these results should be beneficial. It is our intention to follow 
up this direct appeal to the public in all our future general 
advertising. While this may not bring immediate results 
we believe its moral effect will be lasting. 

It appears that the public has a mistaken idea, which has 
grown with the years of ignorance and misrepresentation, 
that the retail druggist is the only man in any branch of business 
who always makes a thousand per cent, on everything he 
handles; and quite naturally the public felt in sympathy 
with the movement of price cutting on proprietary articles, 
for they reasoned no matter what a druggist sold an article 
for, he was still making his enormous profit, and this prevailing 
idea, in the minds of so many, is what really gave price demoral- 
izers the support which they have received, for it has been 
their object to leave the impression with the public that they 
had been robbed by the retail druggists in the past, and that 
they had come as a savior to rescue them from exorbitant 
prices. 

The first great effort that the retailer should aim at ought 
to be a general appeal to the public, through newspapers and 
otherwise, that the average profit in a retail drug store is not 
as large as it is in the average retail store in other lines of busi- 



THE EFFECTS OF PRICE MAINTENANCE 

The question as to the effect on the volume of sales, produced 
by the arbitrary maintenance of a price, is one which has never 
ceased to offer a field for speculation. The following discussion 
of this subject gives the views of " The Advertising Manager 
of a Widely-known Toilet Specialty " whose name is not given : 



422 ADVERTISING AS A BUSINESS FORCE 

In a recent issue of Printers' Ink Jesse Straus, of Macy's, 
gave your readers a most interesting article concerning price 
cutting from the standpoint of the big department store using 
price as its principle argument to win trade. 

Most of our readers will probably disagree with Mr. Straus 
in many particulars, assuming that a price-protected article 
gains the closer co-operation of the dealers as a whole because 
of the assured profit. 

But let us consider this matter now from the standpoint 
of the manufacturer of an article simply protected by trade- 
mark, and not by patent, and, therefore, exposed to the army 
of imitators who are always ready to step in and take advantage 
of a demand created by some one else. There are many manu- 
facturers of trade-marked goods in the drug, food, and other 
fields who do not believe in forcing the consumer to pay the 
big dealer what amounts in his case to an abnormal profit 
simply that the little dealer may make what for him is a normal 
profit. 

The theorist says, "The manufacturer ought to protect 
the little fellow, otherwise he cannot exist." But from a 
practical standpoint does the manufacturer want the little 
fellow to exist.'' Aren't there hundreds and thousands of 
small retail stores in every class of business which have no 
reason for existence.'^ Wouldn't the manufacturers, the dealers 
themselves, and the consumers all be better off if all retail 
merchandising could be concentrated in one half or one quarter 
the number of stores now struggling to make both ends meet.^ 

The manufacturer's problems of distribution and of selling 
would be simplified, the retailers left in business would, by 
their increased volume of trade, be able to reduce selling expense 
and be able to give better service than it is possible for the 
small store to give. 

It is a noticeable fact that in all lines the small dealer is 

the one who talks most about the advantage of price protection; 

the dealers with the really "worth while" business 

Protecting £ggj that they are able to conduct their own affairs 

the bmall i i .1 • • -.i . j- j. j.- j 

Dealer ^^^ make their own prices without dictation or ad- 
vice from outside sources. The small dealer, on the 
other hand, isn't strong enough to bear the brunt of the battle for 
business alone; he not only lacks output, but he lacks capital 



*Printers' Ink, August 25, 1910, p. 8. 



PRICE MAINTENANCE 423 

and, as a rule, lacks business acumen. He is not the man the 
manufacturer must look to for a really profitable business. 
By protecting his prices, the manufacturer may get the good- 
will of trade of this class but it won't help him with the big 
dealer, who in most cases opposes any plan that puts him on 
an equal footing with the little dealer with his small capital, 
his imperfect organization, and his general business incom- 
petency. 

Then, too, there is the public's side of it. Most advertised 
specialties are in a certain sense luxuries. Luxuries are largely 
purchased by those who can afford them, and the lower the 
price of the luxury to the consumer the wider its field of sale. 
It is a case of "the higher, the fewer." 

Nearly every advertised, trade-marked specialty has its 
unadvertised, untrade-marked imitators selling at lower prices 
than the original. If the advertised article is price protected, 
and the imitation is sold for considerably less, price protection 
makes the difference in the cost to the consumer between the 
original and the imitation a pretty strong factor. 

In proof of the writer's opinion that price maintenance by 
raising the cost to the consumer tends to decrease the con- 
sumption of an advertised specialty, I have only 
The to state the actual experience of the trade-marked 
Relation toilet specialty advertised by my firm. In those cities 

to the where price agreements exist between dealers them- 

Volume selves — where all are getting " full prices " — our per 

of Sales capita sales without exception are the smallest. In 
the cities and towns, where cut prices are in vogue 
our per capita sale is the largest, though concentrated in fewer 
stores. 

In the full-price town the rank and file of small dealers are, 
indeed, "more friendly," but this friendship doesnt show up in 
their sales. In the cut-price town the rank and file are "un- 
friendly" — all advocating and advising "price protection" 
— but in those towns the sales of the few big dealers selling our 
product on a comparatively small margin are so large and so 
satisfactory as to make us almost willing to forget that the 
small dealers are there at all. 

Another thing which makes "price protection" a poor business 
policy for the advertised specialty — that is the unpatented 
specialty — is the opportunity it affords the dealer to make 
an abnormal profit on the imitations. For example, suppose 



4!24 ADVERTISING AS A BUSINESS FORCE 

"Mrs. Blank's Face Cream" is a widely advertised, price- 
protected article, and suppose the retail selling price is fixed 
and advertised at 50 cents. The dealer with his cheap and 
inferior "own label" face cream sees a chance to make a harvest 
by just under-selling Mrs. Blank's cream a trifle or even 
getting the same price for both. 

How can he do it? The druggists, and dealers in other lines 
to a lesser degree, located in residential districts or in small 
towns, have enough personal influence with at least 50 per 
cent, of their trade to divert a considerable demand for Mrs. 
Blank's cream to their own kind. The dealer has a big incentive 
to do this because Mrs. Blank's advertised and protected 
price has established a face cream value which enables him 
to sell his own label product for possibly 300 per cent, profit 
as compared with 75 per cent, on Mrs. Blank's. 

In other words price protection is more than likely to defeat 
its own object and increase rather than decrease attempts 
at substitution. It enables the dealer to charge much higher 
prices for the imitation than we would charge or could get were 
it not for the known price of the original. 

I am aware of the fact that these ideas are radical in the 
extreme, and some of your readers w^ll probably say that the 
principles advocated give the small dealer little chance to make 
a living. I admit that my facts — for they are facts and not 
theories — make no allowance for sentiment. Business under 
present-day conditions is a "cold-blooded" proposition, and 
price protection for the trade-marked but not patented specialty 
is pure sentiment, a positive handicap in creating a maximum 
sale of such products. 

After this presentation of some of the main arguments for 
and against the price- maintenance policy, it may be only fair 
to give the advocates of the policy one final word " in rebuttal." 
L. B. Jones, advertising manager of the Eastman Kodak 
Company, of Rochester, N. Y., sums up the arguments in favor 
of price maintenance from the standpoint of manufacturers, 
retailer, and consumer, as follows : 

*Does the restriction of retail prices benefit or injure the 
public? 

*Printers Ink, May 4, 1911, p. 2. 



PRICE MAINTENANCE 425 

The right of the manufacturer to maintain a restricted price 

policy must, in the last analysis, depend upon the answer to 

that question. If such price restriction actually 

Pnce -'^^fl^^- throttles competition, it is a bad thing — if, on the 

the Public other hand, it encourages competition in quality and 

in service, it is a good thing. 

There is more than one kind of commercial competition. 
There is competition in price, with its ever attendant danger 
of loss in quality. There is, where established, maintained, 
and published prices prevail, a healthy competition in quality. 
The former is sometimes and the latter almost universally to 
the benefit of the ultimate consumer. 

The manufacturer, who restricts the prices at which his 
goods are to be retailed to a certain figure, is just as much in 
competition with other manufacturers of similar goods as are 
those who do not restrict prices — but in a more healthful 
way. Bear in mind, however, that this discussion refers only 
to an individual concern or corporation — not to a combination 
between natural competitors to create an artificial price. 
That's another and quite foreign subject, though, unfortunately, 
likely to be confused by some people with the real question at 
issue. 

The manufacturer who publishes a price list on his goods, 
allows a certain discount to the dealer in those goods and 
then insists on that dealer selling his goods at the list price, 
is by no means free from competition. If he sells wisely, he has 
familiarized himself with the average percentage that it costs 
the dealer to handle his goods, and he makes his discount 
large enough to pay the dealer a normal profit — a profit that 
will be satisfactory to him, but not big enough to prove a 
constant temptation to cut prices. In making his list price, 
this wise manufacturer will put it at a figure that will pay him 
a normal profit, after giving a discount to the dealer that will 
likewise pay him his normal profit. Such manufacturer is as 
much in competition with other makers of goods as though 
he had no established price — but his consumer customers 
get a square deal; they all buy his goods at the same price. 

The retailer must make a certain percentage of profit over 
and above the cost of doing business or go into bankruptcy. 
Isn't it manifestly fairer to the consumer, if the dealer nets 
5 per cent, on what he sells to Smith and 5 per cent, on 
what he sells to Brown than it is for him to lose 5 per cent. 



426 ADVERTISING AS A BUSINESS FORCE 

on what he sells Brown and make it up by netting 10 per 
cent, on what he sells Smith? And that's just what happens 
every day where retail prices are restricted. Every 
^^' ^f? retailer knows this, though the buying public does 
fixed Price ^^^' The restricted price plan is, in fact, particu- 
larly favorable to the small consumer, the man whom 
the courts are ostensibly trying to protect. It has been decreed 
that the railroads shall not discriminate against the small shipper 
by giving a lower rate, whether directly or by rebate, to the 
big shipper than the small shipper enjoys. 

Carried to its logical conclusion, the price restriction policy 
means the same thing. All retail purchasers are treated alike. 
It means the square deal. 

And how is the manufacturer affected. He has a widely 
advertised article at, say, ten dollars. It is generally known 
that his goods are sold at list price only. The dealer 
From the is already receiving a normal discount. This manu- 
Manufac- fact^j-er usually keeps ahead in improvements in his 
Standpoint ^i'^^' b^^^' ^^^ ^^^ sake of argument, we will admit 
that a competitor announces an important and 
genuine improvement. What happens? One of three things: 
An improvement in the article in question to meet the competi- 
tion, a cut price in order to pick up the cheaper trade in this 
line, or, if the margin of profit will not admit this, an entire 
abandonment of the manufacture of such article. In cutting 
the price, if that method be followed, the price at which the 
goods are to be retailed may still be restricted at whatever 
lower level may be decided upon as a normal price at the new 
level forced by the competitig improved product. Price restriction 
has in no way prevented a general lowering of price; it has 
simply maintained a uniform price. 

A restricted price means that the goods are to be sold at 
a certain price, that the retailer is not to go either above or 
below that price; but if the established price is abnormally high 
for the quality of the goods, it cannot live. No mere restricting 
of price can annul the laws of supply and demand or of com- 
mercial competition. Indeed, goods that are sold at known 
prices offer themselves to the keenest competition because 
it is so easy for the manufacturers of competing articles to 
figure just what can and must be done. 

The result is that the manufacturer of restricted price goods 
is alive to the fact that he must constantly back up his prices 



PRICE MAINTENANCE 427 

with quality. He is averse to changing his methods or permit- 
ting the retailers to change their methods of handling his goods, 
because he takes an honest pride in his one-price-to-all policy. 
The result is a constant effort to better his products, a constant 
effort to give his customers more for their money. It is a 
competition just as keen and far-reaching, as bitter if you like, 
as a competition in price-cutting. Because one manufacturer 
of automobiles restricts the retail price of his car to $4,000, 
another to $3,000, another to $2,000, and another to $1,000 
does any one maintain that there is no competition in auto- 
mobiles? And similarly there is competition between dealers 
even though they maintain prices — a competition in service 
to their customers that makes or ruins their business, and, 
locally, the business of the concerns whose cars they handle. 

Take hats. Dunlap and Knox derbies are restricted at five 
dollars. You can't buy one for less, yet you can buy a pretty 
good-looking derby for a dollar and a better one for two dollars, 
and sometimes really good for three. But Dunlap and Knox 
are by no means free from competition. It's a competition 
of quality. They just put style and goodness into their hats, 
else men would buy the cheaper ones. They compete with 
each other and with the imported hats and with, perhaps, come 
other five-dollar hats. They compete with the cheaper hats 
by offering better style and quality. But it would be absurd 
to say that hats cost more because Knox and Dunlap don't 
permit the retailer to cut prices on their goods until the season 
is over. 

To the careful observer there can be but one conclusion 
as to the merits of the policy of price restriction. That policy 
means a square deal to the ultimate consumer. It means that 
one man's money is as good as another's. It means that those 
manufacturers who adopt the policy must make good goods 
in order to maintain their prestige, must be ever on their 
mettle to anticipate competition, must forestall it by making 
improvements and making them before the other man does. 
The market is still open for those who do business on the other 
basis, but if their goods do not equal or better the restricted 
price goods the public will buy the restricted price goods. 

Competition began with commerce. Competition must 
continue to exist so long as there are two or more separate 
concerns manufacturing similar goods for the same market. 
If one of these concerns makes highly superior goods and is 



428 ADVERTISING AS A BUSINESS FORCE 

equally alert in its selling methods, it will, by reason of the \i\\\ 
of the survival of the fittest, get the big share of the trade. 
Whether prices are restricted or not has nothing to do with 
the case further than the fact that the concern that makes 
the goods of know'n quality is in a position to make its prices 
known and stick to them. Having cjuality, it can afiPord to 
compete on a quality basis. No underhanded methods by 
which one customer is gained at the expense of another need 
be resorted to. 

The price restriction policy means a square deal for the 
consumer, a reasonable profit to the dealer, and a constant 
effort toward betterment of the product on the part of the 
manufacturer. 

REVIEW QUESTIONS — CHAPTER XII 

1. How does price maintenance affect the advertising man? 

2. What is the basis of price? What part does distribution 
cost play? 

3. What are the dangers from bad choice of price policy? 

4. What are the best arguments for price maintenance: 
(1) From the standpoint of the manufacturer? (2) The 
jobber? (3) The retailer? (4) The consumer? 

5. What are the strongest arguments against it in each case? 

6. How does price maintenance affect the volume of sales? 



CHAPTER XIII 

DISPOSAL OF ADVERTISING COSTS 

THE question, "Who pays for advertising?" is often 
discussed and seldom with any profit. The fruitlessness 
of these discussions is more often due to lack of a clear 
statement of the problem than to any other single cause. Before 
any such discussion has gone far it often becomes clear that 
neither the term "pays" nor the term "advertising" represents 
identical ideas in the minds of the disputants. 

It is generally agreed that the direct outlay for advertising 
the United States runs far over $600,000,000 a year, and there 
is a very strong temptation to undertake to say 
Who Pays categorically that that amount comes directly out 
Advertising of the pockets of some one element of the distribution 
system. We have been told many times that this 
bill is paid by the consumer. Somewhat less frequently, 
but with equal emphasis, it has been declared that the com- 
petitor who does rot advertise foots the advertising bill of 
the man who does. And these are only two of many ex- 
planations. 

It wall not be the purpose of this chapter to undertake to 
close this interesting question. The most that will be under- 
taken will be a suggestion as to what ought to be clearly under- 
stood by "paying" and by "advertising" before any attempt 
to answer the question is made. 

WHAT IS MEANT BY " PAYING" 

Let us take the hypothetical case of a hardware manufacturer 
with a going plant and an established distribution, having 

429 



430 ADVERTISING AS A BUSINESS FORCE 

among his products a patented stove-cover lifter retailing 
at 25 cents. This specialty never has been specially advertised, 
and it has been handled as a side line, sold in connection with 
other products of the concern. The output is 100,000 a year. 
The price to the retailer is 15 cents, and to the wholesaler 
10 cents, and the actual cost of production based on an out- 
put of 100,000 is 7 cents each. The elements of production 
and distribution cost could then be represented roughly by 
Fig. A. 

Now suppose the manufacturer, who has been figuring 

on a net profit of 3 cents on each lifter decides to spend two 

thirds of this profit in advertising this lifter. Until 

Doubled ^j^^^^ advertising produces some kind of a tangible 

and result we can represent it as coming entirely out 
^'Sf " of the manufacturer's profits (Fig. B). 

But suppose this outlay has been so judicious as to 
double the original demand and raise the output to 200,000 lifters 
instead of 100,000. By doubling his output the manufacturer 
can produce each lifter at a reduced cost. If we call this new 
cost 5 cents, instead of the original 7 cents, we see that the 
net profit on each lifter after paying for the advertising is 
restored to 3 cents (Fig. C) as it was before the advertising. 
But with the same net profit on each lifter and a doubled output 
the manufacturer's total profit is doubled. 

At the same time the doubled business due to the adver- 
tising has produced similar effects in the distribution system. 
The wholesaler's expense of doing business on each 
Effects on Jifter on a basis of 100,000 produced was 2 cents. But 
tion Costs if the volume of the business be doubled (supposing 
the increase to be distributed proportionately among 
the wholesalers) each wholesaler handling the lifter will 
find some reduction in his cost of doing business on each 
lifter sold. His saving will not be as large as that of the manu- 
facturer, but his expense will be reduced. And the same is true 
of the retailer (Fig. D). 



DISPOSAL OF ADVERTISING COSTS 431 



Price to Consumer 25 
Price to Retailer 15 
Price to Wholesaler 10 



P.C. 

3 



P. 

3 



E/ 

2 



P/ 

3 



E.' 
6 



P." 
4 





Figure 


4- 


- Before advertising. 














A, 


P 






ii 










2 


1 







Figure B — Advertising cost taken from manufacturer's pro6t. 



P.C. 

2i 



A. 

2 



P. 

3 



Figure C — Increased production lowers production costs, absorbing adver- 
tising cost. 



D 



E.' 

U 



P.' 



E." 

4i 



P." 

5| 



Figure D — Increased production lowers distribution costs. 
Price to Consumer 18 
Price to Retailer \\\ 
Price to Wholesaler 8i 



E 



P.C. 


B 


s. 


G 


A. 


P. 


E.' 


P.' 


E." 


P." 


2| 


3 


U 


3 

4 


2 


H 


H 


U 


4| 


2 



Figure E — Effect of lowered price on costs and profits. 



432 ADVERTISING AS A BUSINESS FORCE 







OUTPUT 

100,000 


OUTPUT 

200,000 








Fig. 
1 


Fig. 

2 


Fig. 
3 


Fig. 
4 


Fig. 
5 


P.C. 


Manufacturer 

Prime cost 


3 
1 

2 

1 

3 


3 
1 

2 

1 
2 
1 


2i 

3 

4 

u 

3 

4 

2 
3 


2i 

3 

4 

u 

3 

4 

2 
3 


2i 


B. 

S. 


Burden 

Special selling 


3 

4 

u 


G. 
A. 
P. 


General 

Advertising 

Profit 


3 

4 

2 




Price to wholesaler 


10 


10 


10 


10 


8-J 


E' 
P' 


\Miolesaler 

Cost 

Expense of doing business . 
Profit 


10 

2 
3 


10 
2 
3 


10 


10 

U 

3^ 


8i 




Price to retailer 


15 


15 




15 


lu 








E" 
P" 


Retailer 

Cost 

Expense of doing business. 
Profit 


15 
6 
4 


15 
6 
4 




15 

5\ 


2 




Price to consumer 


25 


25 




25 


18 



Each of these cases, so far, presupposes that all prices are to be 
maintained — 10 cents to the wholesaler, 15 cents to the retailer, 
and 25 cents to the consumer. So long as the prices are main- 
tained and demand is not weakened each handler of the goods 
makes more total profit when the output is increased. Some of 
this increase is due to decreased selling expense per lifter, and 
some to the greater volume of sales. In the case of the whole- 
salers we see that the actual profit margin has increased from 
3 to 3^ cents on each lifter, and, with the number of sales 
doubled it appears that the wholesaler is making 7 cents out of 
this lifter trade where he formerly made 3 cents. By the same 
process the retailer's total profit has increased from 4 cents to 
two times 5| cents, or 11 cents. 

Thus the manufacturer is making as much as he did, before 



DISPOSAL OF ADVERTISING COSTS 433 

advertising, on each lifter, and twice as much on the entire 
business. And the wholesaler and retailer are each making 
more on each article and are selling twice as many. The 
consumer, on the other hand, is paying no more than he did 
before. Now the question is, who is "paying" for the adver- 
tising in this case? 

And now suppose that, through one cause or another, the 

prices are reduced (Fig. E) to 18 cents to the consumer, 

11| cents to the retailer and 8| cents to the wholesaler. 

If Prices The output now being at 200,000 with corresponding 

Recdued costs, the price reduction leaves to each of these 

handlers of the goods, and to the manufacturer, only 

one half of the profits they originally made on each piece. But 

each is selling twice as many as he did originally and hence 

is making total profits which are exactly the same as those 

they were making before the advertising. The consumer, 

however, is now paying 7 cents less for lifters than he did 

originally. The question as to who "pays" now takes on an 

entirely different aspect. 

We now see that the problem of "paying" for the advertising 
has to do, not only with the actual outlay for advertising, 
but also with the relation between that outlay and the reduction 
in manufacturing and distribution costs coming from the 
increased demand which that outlay produces. 

And this case takes no account of the potential future re- 
ductions of the same kind which may follow from new demand 
which has been aroused by the advertising but which is not 
yet converted into sales. Nor has any account been taken 
of the effect of this stimulation of demand for one single manu- 
facturer's output upon the trade of his competitors. And these 
are only two out of many other factors which have been left 
out of this case for the sake of making this one point clear.* 



*Throughout this case we have given attention only to advertising by the 
producer. It will make profitable exercise work to develop similar diagrams 
showing the efiFects of advertising by wholesalers and retailers. 



434 ADVERTISING AS A BUSINESS FORCE 

No one can say who has paid for any piece of advertising 
outlay until he knows what has been its effect on demand — 
and consequently on production and distribution costs, and 
on production and distribution profits. 

George Frank Lord, writing under the title "Manufacturer's 
and Dealer's Margins of Profit," brings out some of these 
points quite conclusively. He makes it perfectly clear how, in 
concrete cases, effective advertising has brought about an 
actual reduction in manufacturing and distribution costs : 

*This is a subject of vital interest to every advertising 

man, manufacturer, and merchant. In order to consider it 

with a clear mind it is first necessary to realize the 

Manufac- difference between "margin of profit" and "margin 

%mleTJ^ for profit." 

Margins Margin of profit is the net percentage or portion 

of Profit of the selling price of an article that accrues to the 
seller, after all his selling expense has been deducted. 
Margin for profit is the gross difference between the selling 
price and the cost price. 

One of the chief reasons for the "substitution evil" is the 
failure of the average dealer to appreciate the above distinction. 

One of the chief reasons why some manufacturers do not 
advertise is because they do not appreciate the difference. 

A manufacturer of a patent medicine costing 10 cents a bottle, 
wholesaling at 67 cents and retailing for $1, has a gross 
margin for profit of 57 cents. If he spends 50 cents per bottle 
for advertising and all other selling expenses, his net margin 
of profit is 7 cents a bottle. 

The dealer or druggist buys at 67 cents. If he maintains 
the list price of $1 his margin for profit is 33 cents. His 
net margin of profit is 33 cents less any variation from list 
price, less the proportionate charge against this sale for store 
rent, clerk hire, and miscellaneous expenses. Therefore, his 
net margin may be 15 cents, or nothing, or a minus quantity, 
depending entirely on how much it costs to sell the medicine. 

It is obvious that the sale of any article involves a selling 
expense. 

The difference between the manufacturing cost of an article 

*Printers hik, October 20, 1910, p. 28. 



DISPOSAL OF ADVERTISING COSTS 435 

and its retail price is what the consumer pays for the cost of 
selling and delivering the article to him, and the profits of the 
manufacturer, dealer, and any other middlemen involved. 

No scheme of trading has ever been devised that eliminates 
the important item of selling cost. Various schemes have been 
used to reduce it to a minimum. 

The one great advantage of advertising is that it reduces 
selling cost by creating an increased demand without propor- 
tionate increase in annual or total selling expense. 

The selling expense per sale may be, and frequently is, 
greater, but not on the total volume of business done per year. 

Suppose a dealer sells a non-advertised article for $1 at 
a gross margin of 33 cents profit, and he sells 500 a year. Then 
his annual gross profit on this article is $165. But his net 
profit may be only $65 owing to the proportion of rent, insur- 
ance, local advertising, etc., that must be charged against this 
article, plus the cost of the amount and quality of salesmanship 
required to sell it. 

Now, if this article is well advertised by the manufacturer, 

and the wholesale price raised to 75 cents, it is a fallacy for 

the dealer to figure that his profits on this article are 

If the reduced. He will probably sell 1,000 at an annual 

TVere g^'oss profit of $250 and a possible expense of $100, 

Raised leaving $150 net profit as against $65 of the year 
before. 

The same argument applies to the manufacturer. If, during 
the first year, the article cost to manufacture 50 cents, and 
wholesaled for 67 cents, his gross profit per article would be 
17 cents. And if he sold 100,000, his gross annual profit would 
be $17,000. If his salesmen's and shipping cost amounted 
to $12,000 his net profit would be only $5,000. 

If, in the second year, he spends $20,000 in advertising, and 
sells 200,000 instead of 100,000, his gross margin of profit at 
the new wholesale price will be $50,000, provided he has saved 
nothing in manufacturing cost. But as is well known, doubling 
the output of a factory largely reduces manufacturing cost, 
and it is probable that his would be reduced to at most 40 cents. 
Hence his annual gross profit would be $70,000 and his net 
profit $70,000 less $20,000 advertising, less perhaps $20,000 
salesmen's and shipping cost, or $30,000 net profit as against 
$5,000 the first year. 

Note that in the first year his net profit was $5,000 or 5 cents 



436 ADVERTISING AS A BUSINESS FORCE 

per article, and that in the second year he spends 10 cents 
an article for advertising, or twice the amount of the previous 
year's net profit per article. Yet he winds up the second year 
with $15,000 more profit than the first year. 

It is the failure, in many cases, of both dealer and manufac- 
turer to understand the seeming paradox indicated by the 
foregoing figures that causes the former to be a substituter 
and a "knocker" of advertised goods, and the latter to hesitate 
about becoming an advertiser. 

The point for both to keep in mind is that dividends depend 
not so much on profits per sale as the net annual profits of 
the business as a whole. 

J. George Frederick, in a discussion of selling cost and the 
factors that reduce it, gives some concrete cases of the effect 
of advertising upon the costs of distributing goods : 

*If the muckrakers ever stumble on to the facts about the 
selling expense of some concerns, there will be a series of sharp 
literary explosions. 

There is a manufacturing concern in New York whose 
product is enjoying an international market, and is regarded 
as having achieved success in every way — yet its selling cost is 
still five times its Tnaniijacturing cost! 

Now if this product were a luxury, or even a specialty or 
novelty as yet not universally used, there would conceivably 
be some justification for this selling cost; but the article referred 
to is a typewriter, which has come to be practically a staple. 

There is another highly successful typewriter whose selling 
cost is still four times manufacturing cost. There are several 
other very successful typewriters which have selling expense 
down to three times cost of manufacture, which may be regarded 
as fairly normal for typewriters or any well-known semi-staple 
mechanical device where repair and service after purchase 
is an additional factor. 

But, gazing generally over the field of manufacture, selling 
cost in a surprising number of cases is excessively high. Only 
in the most staple of staple lines does it come down to a more 
sane proposition. One or one and a half times the cost of 
manufacture is a general average for selling staples, while 

*Printers' Ink, August 4, 1910, p. 3. 



DISPOSAL OF ADVERTISING COSTS 437 

in the drug lines, and specialties in all lines, grocery, textile, 
hardware, etc., the selling cost rises to four, five, and six times 
the cost of manufacture. Sometimes, for some articles (and 
not all of them like Col. Sellers' Eyewash, either), the cost 
of manufacture is a mere nothing, and almost the only expense 
is selling expense! 

The estimates of selling expense just made include office 
and overhead expense and everything else chargeable 
Estimates ^^ ^^ "selling end." To examine selling cost more 
Expense ^^ single detail, let us take purely the cost of sales- 
men and sales departments, exclusive of whatever 
else might be chargeable to selling. 

In hosiery and underwear lines this selling expense (frequently 
the only kind there is) runs to 6 and 10 per cent, of net return. 
In men's clothing it runs from 4 to 7 per cent. In office equip- 
ment lines it runs to 25 and 33 per cent., and in drug and 
hardware lines it runs up from 25 to 40 and 60 per cent, and 
higher. In purely luxury lines selling cost has no roof at all 
— it is as expansive as the empyrean blue — according to the 
article, competition and method of distribution. The branch 
agency is mighty expensive machinery of sales, but it produces 
volume and keeps sales contact with consumers keyed up (things 
which are vital in competition). It frequently costs $500 to 
sell an auto, and the average is $100 to sell a piano. In many 
cases, especially in the piano business, there is precious little 
profit left after this high selling cost is expended. 

This matter of increasing selling cost is becoming more and 
more vital all the time, because of two things, the widening 
of markets and the growth of competition. The bigger a 
manufacturing concern becomes, the greater usually does the 
selling cost become. This may seem paradoxical, but public 
accountants will testify to its almost invariable truth, A selling 
organization adequate to the territory, the policies and the 
product of a large concern increases selling cost considerably 
over that of a smaller manufacturer, chiefly because the large 
manufacturer needs more executives and must meet competition 
at more points. He has more baskets of eggs to be watched 
than the small manufacturer. 

In the last decade or two, therefore — ever since the begin- 
ning of big markets and big enterprises — selling cost has 
been rising steadily and become a problem with manufacturers. 
Some have agreeably deluded themselves about the true state 



438 ADVERTISING AS A BUSINESS FORCE 

of aflfairs by figuring loosely that reduction of cost of 'production 
was "helping" to lessen selling cost. But inquisitive modern 
cost accounting turns the light on such delusions for those 
manufacturers (none too many) who are modern enough to 
have thoroughgoing cost systems. 

The one significant thing about selling costs is still blindly 
overlooked by many manufacturers, while, meantime, those 
keener ones who do understand it, and have applied it long 
ago, are the big gainers. Selling cost goes down in proportion 
to the reputation of the goods, and the favorable conviction in 
the mind of the buyer. You don't have to work nearly so hard 
to sell me Baker's chocolate as you do to sell me Jones's choco- 
late. Neither do you have to work so hard to sell dealers and 
jobbers. In fact, in such exceptional cases, like Baker's and 
a few others, you could shut down on all selling expense for 
a time and make a lot of money nevertheless. 

The very best proof in the land that advertising decreases 

selling cost is contained in the situation of Hart, Schaffner 

Effects of ^ Marx, the famous clothing house, as compared 

Advertis- with other clothing houses. Hart, Schaffner & Marx 

ing on are authoritatively reputed to do an annual volume 

Selling ^f business of about $15,000,000. . . . 
°^ Good advertising has been their keynote all this 

time; and to-day their salesmen (who are on salary, not commis- 
sion) talk little else but advertising to dealers. It is related how 
one dealer who listened to a long and interesting delineation 
of what the house of Hart, Schaffner & Marx had done, was 
doing and would do in the way of advertising, suddenly said, 
"Yes, that's fine, but what about the clothes ?" 

The salesman dismissed this subject with few words. "Ask 
those who know, or demand any test you choose — the clothes 
are right. What concerns you most is how those clothes are 
advertised^ And Hart, Schaffner & Marx are so beautifully 
intrenched in their position that they can demand that the 
dealer who holds the line must increase sales every year or make 
way for some one who will. In magazine advertising alone 
this spring and last fall Hart, Schaffner & Marx spent $85,000 — 
about twice what its nearest competitor spent. This figure 
is not a guess, it is checked up frotn the magazines. One 
hundred and twenty-five thousand dollars would probably 
cover the total advertising expenditure, newspaper adver- 
tising and all. 



DISPOSAL OF ADVERTISING COSTS 439 

Now let us measure up selling costs. For the sales depart- 
ment expense (everything but advertising), I learn from inside 
sources. Hart, Schaffner & Marx spend only 2\ to 3 per cent. 
See how this measures up beside other clothing houses : 

Magazine Selling 

Advertising Cost 
1910-11 

Hart, Schaffner & Marx $85,000 2|-3% 

B. Kuppenheimer & Co 49,000 4% 

Samuel W. Peck & Co 29,000 6% 

Alfred Benjamin 24,000 7% 

Here is one of the most powerful object lessons ever tabulated 

regarding the relation of advertising to sales policies. In 

almost perfect proportion to the expenditure for ad- 

Cost Com- vertising, the selling cost has decreased and volume 

^^rf?n^ of sales increased. Those clothing manufacturers 

firms named above are all advertisers — there is an end- 
less number of other clothing manufacturers whose 
names are little known to consumers, and whose selling 
cost ranges all the way from 6 to 9 per cent. They are 
getting neither the reduced cost of manufacture which comes 
with larger volume of sales nor the decreased selling cost which 
comes with trade-marking and consumer advertising. 

As the selling cost named above is that of sales department 
alone, it will be well to examine how much advertising adds to it. 
An advertising appropriation of $125,000 is but .83 per cent, 
of a volume of business of fifteen million. Even supposing 
that the advertising is underestimated and the volume of 
business overestimated, the difference could not be larger 
than 1 per cent. The total Hart, Schaffner & Marx selling 
cost would then stand at 3| to 4 per cent. — which is unques- 
tionably tremendously low. There still remains a large gap 
between the low selling cost achieved by the two clothing 
firms advertising most extensively and the higher cost 
necessary now to non-advertising firms. 

A most interesting thing about this relation of advertising 
to selling cost is that it is cumulative in its effect. The table 
of figures quoted shows how the selling costs of clothing firms 
varied in proportion to the double ratio of amount spent and 
length of time since first consumer advertising began. 

When you get right down to it, the division of selling cost 



440 ADVERTISING AS A BUSINESS FORCE 

into a separate advertising classification is pretty difficult. 
The average accountant in manufacturing concerns is more 
or less at sea, and there has not yet been worked out much 
uniformity of cost accounting on this subject. Live sales 
forces have men who travel with the purely secondary object 
of taking orders. They are out on the road to suggest a new 
sign, a rearrangement of a dealer's store, or anything to clinch 
the dealer's good-will and advertise the house. Now, is this 
selling or is it advertising? 

Likewise, when a special catalogue or folder, enclosing order 
blanks, etc., is sent from the advertising department, and 
orders come in as a result, is that advertising or selling.'* How 
can the two possibly be separated? They cant — the produc- 
tive result of the two working together must be measured 
in contrast with a similar concern where one works alone. 
And that contrast is strikingly afforded in the clothing figures 
quoted. 

As a matter of fact, the entire "selling expense" for any 
specialty or novelty is advertising expense. It must be adver- 
tised in some way before it can be sold at all, for it 
Selling niust educate its prospective buyers and create a 
YoTa^ demand which has not before existed. Any trade- 
Novelty marked staple which sells on individual merit has 
the same road before it. If it would rise above the 
dead level distinctions of quantity and common name, it has 
to turn its selling expense into advertising channels. It must 
sell not to buyers of a generic commodity but to buyers of 
a marked quality. And the selling expense of doing this has 
a "come-back" action like insurance renewal commissions — 
it compounds itself without effort as time goes on — making 
the cost of selling per unit less and less. The selling cost per 
unit of Ivory soap must be pretty nearly infinitesimal by this 
time, else the size of the cake and the retail price would have 
been changed to conform to the increased cost of raw materials, 
labor, advertising, salesmen, etc. — which is making it practi- 
cally impossible for any other soap concern to give consumers 
as much per cake for their money as Ivory. 

The serious problem now before the large company of manu- 
facturers who comprehend the economies of advertising is to 
so study advertising methods as to decrease selling costs still 
further, and achieve in the shortest time and for the smallest 
sum, the largest volume of business. Without the slightest 



DISPOSAL OF ADVERTISING COSTS 441 

doubt, there is a greater waste of wealth and "natural resources" 
through unduly high selling costs than all the Pinchots and 
Garfields and Brandeis ever painted on their imaginations. 
From a careful average of selling costs in many lines of manu- 
facture, I think it would be conservative to say that selling 
cost averages in general twice the cost of manufacture, staples 
included ; which means that America spends annually at present 
forty billion dollars on selling, based on census estimates of 
$21,000,000,000 now expended for wages, salaries, raw mate- 
rials, etc. 

Clean-cut, well-considered, and closely-adapted advertising 
is bound in the future to cut this enormous selling expense 
very materially, and put manufacturing on a more stable 
and effective plane. 

From these discussions of the costs and profits in the distri- 
bution of merchandise there stands out clearly one point. 
It is that the definition of the word "pays" in the question 
"Who pays for advertising.'^" depends very largely on the 
effects of the advertising. A statement made concerning 
advertising outlay which produces absolutely no results would 
not hold at all for advertising expense which brought in mod- 
erate returns, nor would a statement made for advertising 
outlay which brought in moderate returns hold for a similar 
outlay which resulted in the creation of a wide, permanent 
market for a new product. 

WHAT IS ADVERTISING? 

The term "advertising" in the sense in which it is used in 
the larger question, "Who pays for advertising.''" requires 
analysis just as does the term "pays." Here, again, we find 
that our definition depends almost entirely on the character 
of that which passes under the name. If the advertising takes 
the form of publicity which yields neither actual or future 
increase in market, then we are talking about one thing, but 
if it takes the form of an intelligent outlay for securing definite, 



442 ADVERTISING AS A BUSINESS FORCE 

valuable results, then we are talking about something entirely- 
different. In either case, the question as to the source of the 
payment must depend on the desirability of the results aimed 
at and the effectiveness with which the advertising secures them. 

It is a recognition of the distinction between the reasoning 

which can be applied to effective advertising compared with 

that which will hold in the case of unsuccessful adver- 

7 Adver- rising that lies under much of the discussion of the 

Using an question: "When is advertising an investment and 

mint? when is it an expense?" This question, of course, 
is merely a corollary of the major problem, "Who 
pays for advertising?" 

It is this question of how advertising ought to be treated 
on the books of a company that lies back of any attempt to 
reach conclusions as to what constitutes good- will. If good- 
will depends largely on the earning capacity of a company, and 
if the earning capacity depends upon the attitude of the market 
toward the concern's product, and if this attitude, in turn, is 
largely influenced by the character of advertising appeal, it at 
once becomes clear that the question of " How much to spend for 
advertising?" is very closely associated with the question, "How 
much to spend for securing good-will?" 

HOW MUCH TO SPEND FOR ADVERTISING 

The law of diminishing returns works as plainly through the 
problems of the manufacturer as in any field of production. 
And in no place is the operation of this law more clearly defined 
than it is in the matter of advertising outlay. Nearly every 
manufacturer recognizes that there is a point up to which 
increased advertising expense will yield, and beyond which it 
will not yield, adequate returns. This may not be merely the 
point at which the immediately resulting sales will yield a profit 
greater than the advertising outlay. It may be that point 
far beyond this, where all of the elements which go to make 



DISPOSAL OF ADVERTISING COSTS 443 

good-will cease adding value. This point may be far beyond 
the present limits of the business and it may be even a movable 
point. That depends on individual conditions. But every 
manufacturer realizes that since all of his return from adver- 
tising must come either out of increased volume or increased 
profitability of sales there is a point in his advertising outlay 
beyond which he cannot go with any reasonable expectation 
of success. 

This feature of the interrelation between advertising outlay 

jj^^i^ and the possibilities of return is brought out in the 

Much following discussion of the question, "How much 

Be Svent ^^^^ we spend for advertising.'^" This question is 

for Good- discussed in the light of the problems it presents 

^'^ ' to a new concern, which depends in a large part 

for its answer on the ability of the advertising to secure 

"good-will." 

In this article It is taken for granted that the immediate 
effect on sales cannot yield the amount of the outlay and that, 
consequently, the return from the advertising must come in 
the form of "good-will," or, in other words, the possibilities 
of future earnings for the concern. 

*An advertising man who had been reared in the close- 
paring, department store school where the advertising expen- 
diture was fixed at 3 per cent, of the total sales, was called 
into a newly established manufacturing business. Upon being 
given access to the books, he was appalled to find that, whereas, 
the total sales for the previous year — the fourth of the com- 
pany's existence — were not quite a quarter of a million 
dollars, the advertising appropriation for the current year was 
$50,000 — just 21 per cent, of the sales. His first thought 
was that he had been called to assist at an autopsy, for these 
figures would spell ruin with a capital "R" to the depart- 
ment store, and he made remarks to that effect at his first 
conference with the president. 

The latter reassured him with a smile. "We are investing 

^Printers Ink, July 18, 1912, p. 3, 



444 ADVERTISING AS A BUSINESS FORCE 

our money," he said. "Remember, this is a comparatively- 
new concern and among other things it must have to succeed 
is good- will. It must buy that just the same as if it were 
buying bonds — to return not to-day or to-morrow, but years 
hence. Good- will to us is even more important than machinery 
and raw material, for it would profit us nothing to make goods 



1 



^jJX ^ 






AbnluTp-Complrtoi 



BcUUvr — Ctuncter of aftoT 



which we could not sell. So just as we invest a part of our 
capital in machinery, tools and material with which to make 
a product, we put part of it into good-wiU to help sell the 
product. 

"You would not exclaim if we put the fifty thousand into 
salesmen. Yet they might pay a very small return in good- 
will, comparatively speaking, because they might force the sale 
of the goods upon many an unwilling purchaser, and we might 



DISPOSAL OF ADVERTISING COSTS 445 

have to spend more in proportion to the sales as time went on. 
In this case, however, you will see the ratio gradually decline. 
With reasonable efficiency in our general management , in 
five years I expect to see the advertising appropriation re- 
duced to 10 per cent, or possibly a little lower. In this line 
of business it can hardly be expected to fall be low 8 or 10 per 
cent." 

The view expressed above is the new view — a way of looking 
at things which would have caused apoplexy some twenty years 
ago. Even to-day it is heresy in some places. 

A writer in one of the current magazines — supposed to 
be a high authority on financial subjects — strongly advises 
intending investors against buying the securities of any indus- 
trial "greatly dependent upon patents in its manufacturing 
end, or advertising in its selling end." The assumption is, 
of course, that just as patents may be rendered obsolete by 
new inventions and will go out of existence anyway in seven- 
teen years or less, the effect of advertising may be overcome by 
rival advertising, and the advertising of yesterday is as dead 
as an expired patent. That it is very much alive, a glance 
at the good-will columns in the footnote at the bottom of 
this page will show. 

A goodly portion of those vast amounts* set down 

Some there under the head of good-will are the results of the 

of the advertising which has been done — the mill still 

Placed on grinding with the water that is past. Thirteen mil- 

Good-will lion dollars of Woolworth's money invested in the 

highest office building in the world is a stupendous 

advertisement of his good-will account. The B. F. Goodrich 

Company, recently consolidated with the Diamond Rubber 



'^THE RELATION OF THE CAPITAL, ASSETS AND GOOD-WILL OF SOME LEADING 
INDUSTRIAL CORPORATIONS AS REPORTED BY BOSTON NEWS BUREAU 

Name Capital 

Goodrich $90,000,000 

Woolworth 65,000,000 

Sears-Roebuck 48,500,000 

Studebaker 43,500,000 

May Dept 20,000,000 

Underwood 13,500,000 

Loose- Wiles 13,000,000 

*Estimated. 



Assets 


Good-will 


Assets 




Per Cent. 


$100,877,604 


*$57,000,000 


56.5 


65,157,155 


50,075,000 


76.8 


60,768,949 


30,000,000 


49.3 


56,476,143 


19,807,277 


35.0 


21,377,229 


14,343,957 


67.0 


15,476,785 


7,995,720 


52.2 


15,247,152 


7,970,543 


51.6 



446 ADVERTISING AS A BUSINESS FORCE 

Company, capitalizes a cool $57,000,000 of good-will ! What does 
that represent? Patents are of mighty little importance in the 
rubber business, secret processes of manufacture are practically 
common property, location cuts very little figure, proprietorship 
has changed a dozen times, the Goodrich who founded the busi- 
ness having been dead for many years, and no one bearing the 
name figures in the management. That " good-will " represents 
advertising, practically entirely. It is the result — or rather 
one of the results — from the constant repetition of "Best 
in the Long Run." It is summed up in the attitude of 
the young lady whom the writer asked to name the make 
of tires her father used on his car. She didn't know, it 
happened, but she said "Goodrich, I suppose, the same as 
they all do." That's good-will, and that is what it pays to 
spend a mighty substantial proportion of the first few years' 
sales to get. 

With the object of ascertaining whether this new attitude 

toward good-will (which includes, of course, the recognition 

of advertising as an investment) had been assumed 

TF^a< \yy any fyf ^j^g morc conservative financial institutions, 
Means^at P^inte's' Ink sent a letter to 250 banks, members of 

the Bank the American Bankers' Association, asking whether 
there is in financial circles, "a growing disposition to 
regard with favor an aggressive advertising policy when linked 
up with a successfully conducted business," The case of the 
Royal Baking Powder Company was cited, which began with 
a small capital and "invested" the profits in advertising for 
a number of years. Eventually this business, which was almost 
wholly a good-will proposition, was capitalized for $20,000,000, 
and the common stock has paid for some years 12-per-cent, 
dividends. The list of bankers addressed were asked if they 
would consider that sound financing, and were requested 
to state how a man could determine what proportion of money 
spent for advertising could be considered a legitimate invest- 
ment. 

Of those bankers who answered, 33 per cent, state that 
money spent for advertising should be charged to "expense" 
in toto, and, by inference if not by direct statement, that there 
is no tendency to regard an advertising policy as anything 
but running expense. The resulting good-will, they affirm, is 
not to be considered in conservative financing, and has on 
place on a statement of assets. 



DISPOSAL OF ADVERTISING COSTS 447 

Twenty-eight per cent, of the bankers who answered the 
letter say that good-will secured through an aggressive adver- 
tising policy should be given "due consideration" when it came 
to lending money or financing an enterprise. None of these 
bankers would go so far as to say that good-will has any place 
in a financial statement, or that it can be charged to anything 
except expense, but they all asserted what the 33 per cent, 
denied — namely, that the good-will of a concern has to be 
considered very frequently. 

Fourteen per cent, of the whole number came out flat-footedly 
with the assertion that there undoubtedly is a tendency in 
conservative financial circles to regard advertising as an invest- 
ment. With one exception they agree that it would be poor 
bookkeeping to list advertising as an "investment," but they 
admit that it should be given full consideration in extending 
credit. The one exception states that a certain portion of the 
advertising expenditure should be shown on the books as 
investment, the portion to be determined by a comparison of 
the results which had been obtained with the reasonable 
expectation of results to come in the future. 

The other 25 per cent, of replies were absolutely non- 
committal, some stating that they did not care to discuss 
the question, and others taking refuge in generalities such as 
"advertising is a necessity to most concerns," etc. 

That showing is to be considered nothing short of remarkable, 
when it is remembered that ten years ago the average banker 
would have scoffed at the idea of advertising at all. 
Good-will jjg didn't believe in it so far as his own business was 
of Credit concerned, and he was rather inclined to look upon 
it with suspicion when it was indulged in by other 
people. When 42 per cent, of a list of bankers can be per- 
suaded to say that good-will secured by advertising should 
be given at least "due consideration" when determining a 
line of credit, it shows that the status of advertising in the 
financial world is rapidly changing. And the wording of the 
replies shows pretty conclusively that the bankers regard 
advertising as the chief promoter of good- will. Those who 
do not side-step the question entirely meet the issue squarely 
upon that basis. It is not the money spent for patents or for 
trade-mark rights that they are talking about, but the money 
spent for advertising the goods. 

Thus the man who is facing the question, "How much shall 



448 ADVERTISING AS A BUSINESS FORCE 

I spend for advertising?" has better and higher authority 
than ever before for regarding the appropriation as an invest- 
ment, paying dividends in good-will. It is true that it figures 
in the books as "advertising expense," but it goes to make up 
"demonstrated earning power" whenever it is necessary to 
re-finance or extend the credit of the business. It is reported 
on the best authority that the National Biscuit Company had 
been advertising Uneeda Biscuit for three years before the 
sales of that commodity paid a profit, yet no one in his senses 
would maintain that it was "merely an expense." Of course 
the company was selling other crackers at a profit big enough 
to more than offset the deficit, but even if that were not the 
case the advertising of Uneeda would have been an investment 
just the same, and future events have shown that the company 
could have afforded to pay for that advertising out of the 
capital of the concern if no other source w^ere available. Since 
1905 the dividends paid on the common stock have risen form 
4 to 9 per cent, while the physical assets have increased 
only from sixty-two to sixty-six million dollars. While there 
are only four million dollars more physical assets than there 
were in 1905, nobody would be likely to accuse the National 
Biscuit Company of frenzied finance if it should increase its 
capitalization ten to fifteen millions. Yet the greater part 
of the increased capital would be represented by nothing 
tangible. It is simply the demonstrated earning power, much 
of which is the result of the advertising expense of last year 
and the year before. 

It is evident, then, that it is not wise to limit the advertising 
appropriation to an amount which seems likely to "come 
back" the first year. In other words the money spent for 
advertising cannot be expected to return at once with a profit 
in its hand. But it is not wise to plunge so heavily as to 
endanger the credit of the business, for be it understood, good- 
will is a fine thing is connection with a going business, while 
the good- will of a bankrupt concern isn't worth a cent. 

In a sense good-will is a sort of business momentum. As 
long as the concern keeps going, last year's advertising helps 
keep up the speed just as the momentum of the last 
Momentum ^^^^ ^f a locomotive's drive wheels helps send them 
around the next time: but after the concern has once 
stopped, the good- will it used to have will not help start it 
again any more than the locomotive's momentum on its last 



DISPOSAL OF ADVERTISING COSTS 449 

run will help overcome its inertia as it stands in the round- 
house. 

That fact, by the way, makes the new attitude of the bankers 
all the more striking, since the banker always looks at a financial 
statement from the standpoint of what the assets would be 
worth in case of failure — not considering at all what they are 
worth under an aggressive sales policy. 

No less an authority than Elijah W. Sells, of Haskins & Sells, 
Certified Public Accountants of New York, says that "such 
advertising which has a direct effect in creating or measurably 
increasing the good-ioill of a business may be considered as an 
investment, while that which is done to maintain a normal 
distribution or call attention to special temporary prices should 
be considered an expense." In other words, the advertising 
which goes directly to the promotion of the good-will of a new 
concern can properly be capitalized, and paid for out of money 
received for stock, while that advertising which is done simply to 
maintain something already secured should come out of profits. 

Hence it is evident that the answer to the question "How 
much shall we spend for advertising?" is "Enough to secure 
a demonstrated earning power (good- will), which will produce 
profits sufficient to pay for the advertising necessary to maintain 
distribution of the goods." That, of course, is the minimum 
amount. 

Conditions in different businesses vary so greatly that no 
exact percentages can be given. But the analysis of good- 
will on page 445 which was prepared for Printers' Ink by Paul 
T. Cherington, instructor in the Graduate School of Business 
Administration, Harvard University, gives some clues as to 
the conditions which determine whether the amount spent 
for advertising at the start shall be a greater or a less part 
of the capital. 

Since we are discussing an entirely new business, none of 
the " Intangible Factors " will affect the advertising invest- 
ments, except the product and the trade-mark. The lower 
the quality of the product, the harder to create good-will, and 
the more money must be spent. The smaller the profit it pays 
those handling it, the easier it must be made for them to sell, 
which of course means more advertising. The quality and 
adaptability of the trade-mark will affect the advertising in 
the same manner, though not to the same extent. Of course, 
being a new trade-mark, its age and reputation are negligible.